Reverse mortgages are somewhere in the middle between forward mortgage and life insurance products, in my opinion.  Right now the origination process is probably more similar to forward, but many of the assets risks involved relate directly to actuarial risks and translate to someone coming from that perspective.

At the end of the day only Metlife knows what they’ll do with reverse, and even then the periodic evaluation process means nothing is ever set in stone.

Mr. Lunde, 

As to MetLife, one can make a strong case why it would keep its reverse mortgage operations.  That case is further strengthened by the position being developed by Dr. Salter, CFP and Mr. Evensky, CFP.  At the same time one can argue that if MetLife does keep its reverse mortgage operations its financial assessment standards could easily become the most stringent in the industry.   

Could the position advocated within the CFP community provide opportunities for those originate HECMs and are also licensed to sell various non-casualty insurance products or securities to sell prohibited products if HECM proceeds are not accessed to consummate the transaction?  Here the concept is the available credit line of a Saver would simply replace liquid assets which have traditionally been used as an emergency fund so that they can be freed up to acquire more productive assets.  Generally, no cash would be taken at funding beyond closing costs and cash would only be accessed in an emergency.  Since the cash available through the credit line would only be a standby (i.e., contingent) source of cash, how would a simultaneous sale of both products violate the spirit of HERA?  Right now a literal reading of the law seems to result in a violation but that is the domain of those licensed to practice law.  If it is a violation, an amendment should be crafted to exclude such sales. 

Here in California, the question has more difficulties not only because of HERA but also because of California Civil Code Section 1923 [and the related subsections particularly 1923.2(i)] and California Insurance Code Section 785.1 which goes into effect on January 1, 2012.  Since the new California insurance law can have at least two different meanings, it is hoped the California Insurance Commissioner, Dave Jones, will provide a least restrictive interpretation. 

As to new reverse mortgage originators, for years there has been an acknowledged value of life insurance producers and annuity salespeople over other non-experienced reverse mortgage originators including real estate salespeople and forward mortgage originators.  Some argued that the advantage for these individuals was familiarity with products which have a similar structure; others, the experience of selling assets which generate cash.  Somehow the answer seems somewhere in between.