How Slack Regulatory Bodies of the
Bush Administration hurt Reverse Mortgage 

Traditional mortgage practice follows a series of procedures. People who applied for home loans where checked to be certain that they had jobs and so could afford a home. Their credit score or history was checked to be certain that they were safe to be given loans. Most times the home owner was expected to make a percentage down payment. However in time, greedy banks and lenders began to ignore all this. They did not confirm if people had jobs or were credit worthy or could even repay the loans. They just approved loans with juicy interest rates for themselves. They even gave out loans where the home owner had to pay nothing in advance. Some forms of mortgages were designed so that the home owner makes very little payment each month while plunging them into bigger debts each month. 

With a bunch of ill given mortgages out there it was only a matter of time before a bunch of bad mortgages would surface. And when they did surface, they happened in such a large scale that the value of properties plummeted. Home owners could not even sell the house to cover their debts. Soon the banks were faced with a bunch of bad mortgages and little or no capital left. Immediately that happened, the mortgage industry as well as the revere mortgage industry collapsed. Banks lost the power to give out loans. Values of properties fell so any senior who applied for a reverse mortgage loan, will get far less based on the current poor value of properties, and that is if they even get a willing lender in the first place. 

All this happened while the regulatory bodies of the Bush administration watched on, and continued to “propose” stricter rules. With all the warnings and cat calls from experts they practically did nothing until it was too late. The Bush administration should have lived up to its responsibility of exercising proper control on an industry as important as the mortgage and finance industry. Now it has to spend billions of dollars on bail out plans.