Survey reveals a missed opportunity for HECM acceptance

Mutual of Omaha Mortgage reverse mortgage retirement survey

There’s a scripture that says in part, “My people perish for a lack of knowledge”. This phrase has been applied in countless ways and it can be said it applies to retirees who lack a basic understanding of how a reverse mortgage actually works or who’ve been misguided by myths and misconceptions.

Mutual of Omaha Mortgage Survey Results

A recent Mutual of Omaha survey reveals a severe knowledge gap about the basic features of a reverse mortgage among older Americans and retirees. Nearly three-quarters (74%) of respondents in a Mutual of Omaha survey report that they have little or no knowledge about reverse mortgages, with others revealing misconceptions about how exactly they work

“Access to cash is a critical part of a retirement plan, especially when retirees are faced with inflation, unexpected expenses, and longer lifespans,” said Shelley Giordano, director of Enterprise Integration for Mutual of Omaha Mortgage.

Mutual of Omaha surveyed 400 U.S. consumers over the age of 60 between the dates of April 13-25th. Those surveyed were asked to describe their current financial needs and then rate their knowledge of reverse mortgages. They were also asked what getting a reverse mortgage may mean to them and what needs it would meet.

Here are some of the more notable takeaways from Mutual’s survey.

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Sandy Kinder August 28, 2023 at 5:00 am

Hi Shannon:
It is my understanding that the heirs could buy the home for 95% of the value upon death of the borrower. Is that correct or would they have to pay the entire loan balance upon death of the borrower? Thanks for clarification.

Shannon Hicks August 28, 2023 at 5:08 am

Sandy- good question. The 95% payoff only applies if the HECM’s ending loan balance exceeds the current appraised value of the home. For example, if the homeowners had a $400,000 outstanding balance and the home was appraised at $850,000 then the estate or heirs would stand to claim $450,000 after paying off the full outstanding HECM balance of $400,000.

James E. Veale, MBT September 1, 2023 at 12:37 pm


Technically the heirs inheriting the home are not buying it even. when the lower of the current UPB or 95% of the current appraised value of the home payoff rule applies. This payoff rule is under the nonrecourse section of the mortgage contract and is only available to heirs. This payoff rule is NOT available to borrowers.

Larry Melton September 12, 2023 at 1:31 pm

Such a good topic. As a Reverse Mortgage Professional for over a decade I am still answering these basic questions very often. Both to the potential borrower or the family. I continue to stress to clients that they still own and have full control over the property. There is a great need for education in the reverse mortgage space. Thanks for continuing to cover these topics Shannon.
Larry M.


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