In the early 1900s it was quite difficult for individuals to obtain mortgages. A down payment of 50 percent was usually required, and the mortgage was typically a five-year, interest-only balloon mortgage.

During the Great Depression, many home owners could not repay their debt nor refinance their existing loans. Banks then lost the ability to lend when their depositors withdrew their funds. This great financial cataclysm marked the end of unregulated mortgage banking in this country.

Roosevelt's New Deal helped to restore the public's confidence in the mortgage banking industry. Soon the 30-year amortized loan became available, along with standard interest rates and standard underwriting guidelines. Loans were securitized. This added liquidity to the mortgage financial markets.

Seniors were doing things no one had done before. They were signing newly created documents that few people/professionals were familiar with. Today, these very documents are considered "standard." Back then, seniors were taking on 30 years of monthly payments. At that time, this was unheard of. Back then, a 30-year loan was a vastly different concept. Today, this is considered standard.

Back then, the United States government insured these 30-year loans. This was historic. Today, this is standard. Years ago, people were warned that they would lose their homes, that they would go broke if they signed these hard-to-understand mortgage documents. Imagine that.

Now let us fast-forward to the present. There is a new financial concept that many seniors are now exploring. While reverse mortgages have been around since the early 1960s, they were unregulated and took on many forms and were called by different names. Relatively few were done. It wasn't until 1989 that Congress authorized the first government-insured standardize reverse mortgage. Who says that history does not repeat itself? Now seniors are being asked to sign documents attorneys, accountants and financial planners have not seen before. Because reverse mortgages are misunderstood and poorly publicized, few people know the facts.  In some instances, seniors are being told that if they get a reverse mortgage they will lose their home. Does this sound familiar?

The bottom line is this. A new type of financing (30-year loan) permitted seniors to raise their family in the home of their choosing. Together with many years of home value appreciation, another new type of financing (the reverse mortgage) is permitting many seniors to stay in their home AND live the life they were heretofore only dreaming about living.

A reverse mortgage is a special kind of loan. It is special because the senior who is at least 62 years of age never has to make monthly mortgage payments. It is special because all reverse mortgage loans are non-recourse loans. This means that there is no personal liability. If the amount that is owed is greater than the value of the house (assume that the home depreciated in value during the term of the reverse mortgage), then the most the bank can receive is the value of the home. This is an incredible feature. Compare this to the loan that you have on your home now. If the same scenario happened, your bank would sue you personally for the difference. This could never happen with a reverse mortgage.

It is special because it frees up a portion of the equity that a senior can covert into cash. It provides a senior with a wonderful way to reach this equity without selling and without obtaining a loan that they have to make monthly payments on. Many surveys indicate that a majority of seniors prefer to remain in their homes.

It is special because the senior can receive the proceeds in a variety of ways: They can receive money each month, take a lump sum, a partial lump sum or put the money in a reverse mortgage line of credit. Once they make a choice, they can always change their minds. They are never locked into a particular way to receive their money.

It is a special loan because it becomes a lifesaver for both the children and the parents. Over $2 billion a month is spent in this country by children who are financially helping their parents. Many cannot do it anymore. The adult children have to put money away for their own retirement and for the college education of their own children. The parents, on the other hand, have reclaimed their independence and their dignity. In essence, the reverse mortgage transfigures the strained relationship into a loving relationship free from "required"financial obligations.

Now it is time to weigh the facts. Just as the 30-year mortgage changed the financial life for many several generations ago, the reverse mortgage is doing the same for our seniors, who are at least 62 years of age. In fact, the number of seniors obtaining this financing is doubling each year. There are now a number of competing reverse mortgage programs. This includes a special program for seniors that live in high-value homes.

Years from now, when we look back on the evolution of this product, people who remember will say, "What was the fuss all about?" The reverse mortgage changes for the better the lives of our senior citizens. Homes are saved from mortgage and tax liens and from foreclosures. It enables seniors to afford long-term care insurance, home care and life insurance. It enables seniors to accomplish estate-planning goals. Because people are living longer, a reverse mortgage can insure that they will not outlive their money.

And best of all, these pioneers twice made have shown us that financial innovation can have a profound effect upon American society.

DENIS HABER is an attorney and leading authority on reverse mortgages. He has authored numerous articles on the subject and regularly speaks to professional and consumer groups about the benefits of reverse mortgages. For additional information about this topic, he can be reached at (516) 551-2189 or via e-mail at Denhaber@aol.com.