The Evolving Statutory Regulation of Reverse Mortgages in Australia's ‘Risk Society'

A reverse mortgage is a mortgage ‘in reverse’. Under a standard ‘ forward’ mortgage the borrower obtains a loan to acquire a property and eventually attain one hundred per cent equity in that property. Under a reverse mortgage, the borrower releases the equity in the property as cash and uses it for a wide variety of purposes. There are no instalment repayments. Instead the loan (including interest and fees) is generally repaid when the borrower dies or vacates the property. Reverse mortgages are increasingly seen by governments as a legitimate component of retirement planning in the new neo-liberal ‘risk society’ in which seniors are expected to bear an increasing portion of their retirement expenses. However, governments and their agencies are acutely aware that there are a number of legal and fi nancial problems associated with reverse mortgages. In the Consumer Credit Legislation Amendment (Enhancement) Act 2012 (Cth), the then Labor federal government tackled a number of these problems. It will be argued that such regulation was not incompatible with a neo-liberal perspective and that the regulation of reverse mortgages is still a work in progress.