As the industry continues to adapt to a new landscape of lower principal limit factors, reverse mortgage experts say it’s key to remember why most borrowers pursue the products in the first place — and how those motives have changed amid greater education and positive news coverage.

Traditionally, homeowners take out reverse mortgages to gain financial flexibility and address the most pressing needs facing the retired population, like aging-in-place upgrades, medical bills, and caregiver services.

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The Great Recession still looms large in the housing market, as homeowners who took advantage of low interest rates at the beginning of the decade are increasingly electing to stay in their properties instead of trading up.

“Although homeowners have more equity today, most of them also have ultra-low-rate mortgages they locked in during the recession, when rates were consistently below 4%,” Urban Institute researcher Karan Kaul wrote in a Tuesday post that probed the reasons behind a steady decline in repeat home-buying in the United States. “If a homeowner with a 3.5% rate were to trade up to a bigger home, it would come with a new mortgage at the prevailing, higher rate.”

That trend has conspired to boost the ranks of first-time homebuyers, who in 2017 accounted for 60% of all purchase mortgages taken out with the Federal Housing Administration and other government-sponsored enterprises (GSEs) — a significant jump from the 40% before the financial crisis of the late 2000s.

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Few originators’ duties are complete after a client’s reverse mortgage has been closed. For many borrowers, these reverse mortgage specialists continue to be the first point of contact when assistance is needed with their loan.

Although some borrowers have general questions, servicing issues are often the reason why an originator hears from a borrower again.

Lynn Wertzler, president of Greenleaf Financial in Portland, Ore., said he recently had a client whose servicer erroneously cancelled his reverse mortgage line. The client found out when contacting the servicer about an unrelated homeowner’s insurance matter, and he immediately called Wertzler for help.

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In a wide-ranging dive into the pros and cons of taking out reverse mortgages, Forbes this week advised consumers to shop around.

“Ideally, you’ll want to get at least three quotes,” financial planner and Forbes contributor David Rae wrote. “Make sure each proposed reverse mortgage shows a selection of margins and also illustrates how your choices affect the upfront cost and net payouts.”

Rae introduces reverse mortgages as a potential solution for the retirement stresses facing the baby boom generation, including underfunded savings accounts and a lack of defined benefit pension plans.

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Reverse Mortgage Solutions recorded $29.6 million in pre-tax losses during the second quarter of 2018, with management at its parent company in part blaming high costs associated with Ginnie Mae buyouts.

In addition to elevated fair value losses, Ditech Holding Corporation (NYSE: DHCP) pointed to an extra $9.7 million in borrowing costs related to mandatory buyouts of Ginnie Mae securities as a key reason for the reverse segment’s lackluster second quarter.

“We are proactively managing buyouts in the reverse segment to continue to stabilize the business,” chief financial officer Jerry Lombardo said on the company’s earnings call last week.

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As China faces the familiar demographic math problem causing economic headaches in countries around the world, the nation’s government has decided to expand its reverse mortgage program.

The China Banking Regulatory Commission last week made reverse mortgages available to all homeowners aged 60 and older, according to a report from Sixth Tone, an online publication that covers Chinese policy and culture.

Initially rolled out in June 2014 as pilot programs to residents of Beijing, Shanghai, and Guangzhou, the program — open to homeowners aged 60 and older — has steadily expanded into newer markets even though only 132 people have actually taken the government up on the offer.

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After teasing a new private reverse mortgage offering in the spring, Longbridge Financial on Monday formally announced its Platinum mortgage program, marking the latest in a string of new proprietary products hitting the market this year.

With the Platinum, the Mahwah, N.J.-based Longbridge seeks to tap into a wider range of potential borrowers than the government-backed Home Equity Conversion Mortgage currently serves, including condo owners and seniors with high-value homes. Borrowers can access up to $4 million in upfront cash, with additional options for homeowners who want to minimize origination costs.

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