Discovering a Lifeline in Your Home
Just as a passenger on the Titanic might find the dining table they used the night before now serving as their life raft, many older homeowners may come to realize that their home is their ultimate saving grace.
Sandwiched between the Millennials and Boomers Generation Xers who are poised to become the next reverse mortgage market.
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Here’s why Americans can no longer ignore their economic pain…
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Every reverse mortgage professional has a small yet vital role to play in keeping the ship pointed toward market expansion despite a turbulent and uncertain market
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Like the mythical phoenix, the Home Equity Conversion Mortgage industry rose from the ashes of the housing crash and economic crisis of 2008, followed by several reincarnations as the reverse mortgage program was tweaked, pruned, and curbed the pool of eligible borrowers. Yet, despite the undeniable lack of retirement preparedness among retiring homeowners, reverse mortgage acceptance and market volumes remain relatively stagnant. Notwithstanding these hurdles, several industry participants and financial pundits believe the HECM is poised for growth.
Much like Sisyphus who eternally pushes a rock up a hill- only to have it continually come back down, our industry pushed forward past the housing crash as home values rebounded, only to be pushed back by a never-ending onslaught of new rules and product restrictions. Do we resign ourselves to unexceptional growth in the coming years, or explore more useful ways to capture the imagination and hearts of older homeowners?
Our industry has been steadily and quietly rebuilding as lenders have not only adapted to the new landscape of HECM lending and regulations, but also their marketing approach. As we stand midway between the past economic crash and future opportunity we should invest our time wisely to prepare. Chief among those preparations is how we approach eligible homeowners. As counterintuitive as the reverse mortgage is, we must avoid using mortgage terminology that is not analogous to traditional mortgages such as…
A banker lends you his umbrella when it is sunny and wants it back when it rains. So says the well known joke about the sad state of consumer lending.
“After the recession, our clients called, telling us that their banks had canceled their lines of credit, even for people who had good credit. That’s the time when you need it most.” These are the words of John Salter, notable financial expert and principal at Evensky & Katz as quoted in a recent CNBC article “Putting it in reverse, advisors warm to reverse mortgage”.
As unprepared American retirees face dwindling options to access credit or home equity, the reverse mortgage continues to deliver. Hard learned lessons are usually embraced as a cautionary tale. Unfortunately, the American consumer has an exceedingly short memory when it comes to the lessons taught by the 2008 financial crises. Few understand or remember the significance of artificially low interest rates, the false security of rising home values, HELOC payment resets and the fallout of rising interest rates. Fortunately, older homeowners have some remaining viable options to access cash in their non-working years. One option remains while many march on, unaware of the potential financial time-bombs that lie ahead. The Home Equity Conversion Mortgage.
Every senior homeowner should take a hard look at their financial state…
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With August HECM endorsements hitting a nine year low of 3,200 plus loans many are beginning to ponder the long term effects of HUD’s recent spate of changes to the federally-insured reverse mortgage program. August’s numbers show the lowest monthly volume of endorsements and three trailing months since June 2005 when only 3,139 HECMs were endorsed…
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