BackTen financial institutions in Taiwan are currently participating in a program focused on implementing the government's senior citizen reverse mortgage policy. An investigation of the Control Yuan has resulted in specific recommendations to the government for further improving the program.
The program helps to improve the standard of living of the elderly by enabling them to convert their real estate assets into cash while continuing to live in their homes. It also lightens the government’s burden by reducing the amount it has to spend on financial aid, long-term care and social insurance for the elderly.
The Control Yuan’s investigation research report points out that while the main aim of the reverse mortgage program is to provide seniors with cash for their living expenses, the amount offered by banks, after risk factors, transaction costs and profit considerations are taken into account, may not be sufficient to enable the loan beneficiaries to make ends meet. Moreover, seniors who own property with low-market value or who require long-term care do not meet the banks’ eligibility requirements for such loans, and may even be excluded. Therefore, it is essential that the government implement a more public welfare-oriented model of the program. However, strict qualifications and a lack of stable financial resources have made this difficult.
The report recommends that the government establish a risk sharing mechanism in order to lower the risks for participating enterprises and expand the program’s market scale, so as to benefit more people. It also recommends that the government map out a program model that is more financially feasible and that at the same time balances the care needs of disadvantaged citizens, so that the public welfare model and commercial model of the reverse mortgage program are not mutually exclusive.
Source: The Control Yuan
