Explain in brief the following: Reverse Mortgage (RM) is specially designed by the banks for certain category of the customers.

Reverse Mortgage (RM) The RM is formulated for the old age care of home owners, who have inadequate income to support themselves. Under RM, the Bank makes payments to the borrower / borrowers (in case of living spouse), against mortgage of his / their residential house property. Payment may be made either by way of: periodic installments; or lump sum payments. The borrower is not expected to service the loan during his lifetime. The cause of loan recovery occurs on the demise of the last surviving borrower or on his/her leaving the house property permanently/happening of any event which triggers foreclosure. Reverse mortgage is a novel and socially preferred alternative to selling and moving out of the house in order to generate a fixed income stream. Currently, there is lack of awareness about this product in India. However education and counseling can help the elderly to understand its benefits over traditional loans and also the emotional, social and physiological advantages that reverse mortgage offers. Development of a strong financial and regulatory framework is also needed to make this concept successful in serving the needs of the senior citizens in India.