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The Reduction Of Reverse Mortgage Products
Much like an earthquake can change the overall landscape creating new shorelines, ridges and hills the exit of Metlife will most certainly change the mix of reverse mortgage products. The products most likely to see a reduction are The HECM Saver and Purchase. Watch this week’s video for more.
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Editor in Chief: HECMWorld.com
As a prominent commentator and Editor in Chief at HECMWorld.com, Shannon Hicks has played a pivotal role in reshaping the conversation around reverse mortgages. His unique perspectives and deep understanding of the industry have not only educated countless readers but has also contributed to introducing practical strategies utilizing housing wealth with a reverse mortgage.
Shannon’s journey into the world of reverse mortgages began in 2002 as an originator and his prior work in the financial services industry. Shannon has been covering reverse mortgage news stories since 2008 when he launched the podcast HECMWorld Weekly. Later, in 2010 he began producing the weekly video series The Industry Leader Update and Friday’s Food for Thought.
Readers wishing to submit stories or interview requests can reach our team at: info@hecmworld.com.
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We are hearing that some companies are no longer offering fixed rate Savers due to pricing issues. If marginal rates go much higher, the adjustable rate Saver will lose some portion of its current base beyond the loss of production at MetLife Bank.
For another segment of the market, the issue is not so much about interest rates as having a cash reserve when needed. With higher interest rates, the available line of credit should grow faster for those needing a cash reserve. As long as the financial planning community is pushing reverse mortgages as a replacement for a cash reserves, we should see continued sales of Savers and possibly some growth.
One area of concern is the spread of state law which restricts the use of proceeds like California AB 793. Laws of this nature could turn the financial advisor community against the products.
For now, it seems Saver and HECMs for Purchase endorsement volume will drop by as much as 20% of their current levels. While there is some hope for Saver endorsements to turn around in the near future, it is not clear how long it will take for endorsement volume on these products to turn around.