National Housing Bank has come up with a plan of refinancing the banks whereas housing finance companies (HFCs) will extend reverse mortgage loans to senior citizens.
It will also provide guarantee for the requirements of banks/HFCs to be able to make regular payment over the expected period to the senior citizen borrowers.
This will help the senior citizens who are mortgaging their house upfront to receive payments over the period.
Addressing the seminar on reverse mortgage seminar organized by NHB and Harmony for Silvers Foundation, S Shridhar, NHB chairman, said, “We decided to provide guarantees because senior citizens’ organizations had raised concerns about lenders defaulting on their obligations before designing the reverse mortgage scheme,” said Shridhar.
He said “During the loan, if something happens to the borrower, NHB will make good the payments to the bank”.
NHB will also open counseling centers, and the first centre will be opened at branch office in Delhi on reverse mortgage.
Shridhar told that in July last year, talks were held between NHB and IRDA and insurance companies to combine the reverse mortgage loan with an insurance plan, which would provide an pension to the senior citizen after the loan tenure of 15 years are over.