Japan to Offer Reverse Mortgages to Elderly Poor, Nikkei Says

Japan to Offer Reverse Mortgages to Elderly Poor, Nikkei Says
By Tak Kumakura
Bloomberg, Sept 4, 2006

The Japanese government will start providing reverse mortgages to elderly people who need financial help, the Nihon Keizai newspaper reported, without saying where it obtained the information.

From April next year, the government's Ministry of Health, Labor and Welfare will lend money to people aged 65 or older, using their homes as collateral. The government will sell the houses after they die and recover the borrowed money.

The move would help reduce welfare expenses for the poor, which total 2 trillion yen ($17 billion) annually. About 20,000 people, or 5 percent of the elderly people who receive welfare payments for the poor, own real estate, according to the newspaper.

If half of those who qualify receive help through reverse mortgages, the government could save 10 billion yen a year. The mortgages would apply to properties worth 5 million yen or more, the newspaper said.