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A Comparative Analysis of Reverse Mortgages: Evidence from Puerto Rico and the United States

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  • Rogelio J. Cardona
  • Karen C. Castro-Gonzalez

Abstract

This paper is a comparative and descriptive analysis of reverse mortgage loans originated in the United States and Puerto Rico from 2010 to 2012 and examines whether differences exist between both jurisdictions and the possible reasons for the latter. The study also compares the average profile of a reverse mortgage borrower in the United States and Puerto Rico. The number of new reverse mortgages generated in the United States and in Puerto Rico decreased from 2010 to 2012. However, during that same time period, the interest rate charged in Puerto Rico on reverse mortgages was higher than in the United States. There was also a reduction in the age of the average borrower. The distribution or the uses of the borrowed funds in Puerto Rico is consistent with prior studies performed in the United States.

Suggested Citation

  • Rogelio J. Cardona & Karen C. Castro-Gonzalez, 2014. "A Comparative Analysis of Reverse Mortgages: Evidence from Puerto Rico and the United States," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 8(5), pages 41-57.
    • Handle: RePEc:ibf:gjbres:v:8:y:2014:i:5:p:41-57
    as

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    References listed on IDEAS

    as
    1. Hui Shan, 2011. "Reversing the Trend: The Recent Expansion of the Reverse Mortgage Market," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 39(4), pages 743-768, December.
    2. Todd Sinai & Nicholas S. Souleles, 2007. "Net Worth and Housing Equity in Retirement," NBER Working Papers 13693, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    Reverse Mortgages; Home Equity; Elderly Consumers; Home Equity Conversion Mortgage;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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