AARP, the National Reverse Mortgage Lenders Association and the National Consumer Law Center came out in favor Tuesday of a Department of Housing and Urban Development proposal for reverse mortgage lending standards that would insure borrowers have the ability to pay property taxes, homeowners insurance, and association dues, assessments and upkeep.

However, the National Council on Aging said it is important that financial assessments and suggested tax and insurance set-asides don't become so restrictive that they bar reverse mortgages from moderate income seniors who need them.

The groups’ comments came in written testimony for a Senate Banking Committee Housing Subcommittee hearing on the loan product that has seen its popularity and problems increase.

About 10 percent of reverse mortgage borrowers are in default because they have failed to pay taxes and insurance on their homes. Homeowners can qualify for a reverse mortgage starting at age 62. AARP called for the Consumer Financial Protection Bureau to develop suitability standards for the financial product.

“Lenders are permitted to recommend any loan product, while housing counselors are prohibited from providing advice. Consumer protections need to be strengthened in this arena,” AARP said.

The average age of reverse mortgage borrowers has declining from 76 in 2000 to 72, in 2012, AARP said it is concerned that these consumers will not have the money they need in their later years for health-care expenses.

Both AARP and the National Consumer Law Center want HUD to extend the amount of time past the current 24 months reverse mortgage borrowers have to repay delinquencies before losing their homes.

“HUD treats senior homeowners with reverse mortgages much worse than it does homeowners with forward-mortgages. Homeowners with forward-mortgages are permitted to repay advances for tax and insurance over the entire remaining term of the loan,” the center said.

HUD said in November that to reduce reverse mortgage delinquencies, it planned to implement financial assessments of borrowers, tax and insurance set-asides where necessary, and limiting the draw at origination to mandatory obligations.