The problem is not the desire of seniors. NRMLA did a quick survey and believes the 10% PLF reduction means 20% fewer seniors will qualify. The reason for the 20% drop is LTVs. The existing debt is just too high compared to value so fewer seniors have the equity needed to qualify.

The 10% reduction of PLFs was directly related to lower home value appreciation projections and a poor decision by the Administration to ignore industry standards. If home values go up, existing LTVs rise and so will PLFs. Reduced home appreciation rates is a double edged sword.

Do we really think that folks are saying to themselves “I think I'll wait for my home's value to reach its' lowest point in years, then I'll do it.” ?

These folks have already lost the 10% by waiting, and more thru increased margins. When (if?) housing values turn back up, they will likely be accompanied by rising interest rates..which as we all know will easily eat up any gain in value.

Absent unforeseen changes, will a homeowner ever have more money available to them (and in the future with credit line growth)then they do today, right now? This is all information I convey as delicately as possible to my clients. It can be hard to hear. Once I have shown them a few scenario's of values,rates and age they can at least make an educated decision.

While no prognosticator, lenders and originators should be preparing to weather a long winter season. There is little doubt that Mr. Peter Bell is right; those who survive the immediate future should be in a very strong position to take advantage of the turn around. Like most industries dependent upon ever increasing home values, there will be upturns as well as downturns. Right now we are in a retracting and rebuilding mode.