Reverse mortgages may be picking up some increased interest soon in India, as talks between the National Housing Bank (NHB) and government-owned Corporation Bank are ongoing, India’s Financial Chronicle reported Monday. NHB has already partnered with Life Insurance Corporation of India in order to develop a reverse mortgage product, the report states.
Reverse mortgage products already in the market in India have seen success in specific regions including the southern, western and parts of the northern part of the country, the article states. “Although people are still a little reluctant to mortgage their property in small towns, people in big cities, especially, senior citizens are looking forward to a product that assures them a steady source of funds,” it says. Currently, 10 banks and four housing finance institutions offer reverse mortgages there, with Star Union Dai-ichi Life Insurance being the only life insurance company to offer reverse mortgages, the article states.
“We expect the MoU (memorandum of understanding) to be signed very soon after which the product can be launched,” said R V Verma, chairman and managing director of National Housing Bank, according to the article.
It also says that NHB indicates as soon as LIC steps into the reverse mortgage segment, other insurers will also follow suit and will come up with similar products, expanding the market.
The program is slightly different from the U.S. Federal Housing Administration program, but shares many similarities.
Read the Financial Chronicle article.
Written by Elizabeth Ecker
