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EPISODE #823
AARP notes interest rate impact on would-be reverse mortgage borrowers
[AARP]
“Just as they are for homeowners or would-be homeowners with conventional mortgages, higher interest rates are bad news for people who have or are considering reverse mortgages. But not entirely, and not necessarily in the ways they might think.”
Other Stories:
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[New York Times] Boomers bought up the big homes and they’re not budging
[Market Watch] I’m running out of options: Mother-in-Law’s can’t pay her bills.
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HSomRSan Clev
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1 Comment
Is it all about interest rates? Perhaps, if one ignores the damage done to HECM principal limit factors (similar to loan to value ratios and used to determine gross proceeds at closing) by the Trump Administration on 10/2/2017. For its own reasons, the Biden Administration has done nothing to turn back those changes so that the HECM can provide the financial cash flow relief to participating senior homeowners that HECMs were initially designed to provide.
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What we have seen in the last six months is what can generally be described as the worst start to any HECM fiscal year since September 30, 2003. Worse, based on HECM CNAs (Case Number Assignments) and an ongoing annualized and modified pull through rate, the third quarter (ending June 30, 2024) of this fiscal year will most likely have a lower HECM endorsement total than either the first quarter or second quarter of this fiscal year. It is now anticipated by some number crunchers in the industry that this fiscal year ending September 30, 2024 could easily end up being the worst HECM endorsement total for any fiscal year in stretching back 21 fiscal years.
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If anyone in 2008 would have suggested that this is where the HECM market would be
almost 16 years later, I would have laughed as I am sure many others reading this comment would have.