State of The Reverse Mortgage Industry Interview

image MortgageOrb recently sat down with Marc Helm, COO of Reverse Mortgages Solutions to discuss the state of the reverse mortgage business.  During the interview, Helm discusses the secondary marketing potential for reverse mortgages and the new interest from insurance companies.  Below is a quick snapshot of a portion of the interview.

Q: How do you see the state of reverse mortgages in 2009? Do you see the market expanding – and, if so, which regions will see the greatest growth?

Helm: The reverse mortgage market has been solidly successful since its inception and will continue to expand at a measured pace this year, limited by fewer warehouse lines and investors. Even Fannie Mae may tighten its purchases of the product, from years past. Offsetting this, Ginnie Mae is becoming a bigger player on the securitization side of the transaction.

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The growth regions reflect demographics – larger states with stable or enlarging senior populations will experience the most reverse mortgage growth; that’s California, Texas and Florida, to name the top three. New, higher loan limits will serve to prime the pump in those states.

Q: What are the current secondary marketing potentials for reverse mortgages?

Helm: Beyond the new Ginnie Mae involvement, there is new interest in the sector coming from life insurance companies, which are typically cash-rich and now perceive the reverse mortgage product as a hedge against their traditional policy-customer model. For these companies, one investment (reverse mortgages/rising valuations) would earn as the other (life insurance) runs against aggregate assets.

So, an insurance company generates revenue (on its life insurance portfolio) and then can invest in appreciating assets that will later pay insurance beneficiaries when policyholders die. Additionally, they may sell seniors other long-term products, such as long-term medical care, which would be profitable for a young senior (i.e., 62 years old). Overall, the entry of these life companies spells more money for the reverse mortgage business and more players.

To read the rest of the interview, check out the link below.

Interview with Marc Helm (MortgageOrb)

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  • This might be a fitting topic to relate an experience I recently had. I had been asked by the Company I work for (which only functions in seven Western States)
    to find a National Company to place Reverse Mortgages thru. I found a Company in Florida, who with HUD/FHA
    approval, has multi-leveled the Mortgage Industry in 46 States. My Company, headquartered in California,
    occasionally has long time customers who in the last years of their life either relocate back to their roots or mover closer to children in Eastern States who can assist them. Because they are satisfied clients, they contact us about a Reverse Mortgage.
    Since HUD rules will only allow me to be licensed
    by one Mortgage Company at a time, I placed my wife
    in the new program. FINALLY TO WHAT’S IMPORTANT!!!!
    The first lead was a beautiful, very knowledgeable
    lady who spent thirty years in the Real Estate business in the Sacramento Ca. area. She had forgot
    in the last five minutes more about mortgages than I’ve
    learned in my whole life. Thus, she was a delight to work with. She lived in North Carolina (Two daughters lived in New York City where they wanted her to move; they compromised with North Carolina.) The first thing She and I learned was Counseling, while it could be done by telephone, had to be done by a Counselor who lived in North Carolina (PROTECTIONISDM). As it turned out, when our conversation first begin, the Lady was actually in the hospital. I apologized for bothering her via her cell phone, but she said, no, she was getting desperate to stop her house payment which had become very burdensome. Once She got home, the Counseling was completed by a Counselor who lovingly came to her home because She was physically unable to travel. Then, an application was taken by US Mail and in time the Reverse Mortgage was granted by METLIFE. NOW THE IMPORTANT POINT!!!!! My Wife has been recently notified by the Florida Company that the Company can no longer write Reverse Mortgages in North Carolina because STATE LAWS say ONLY DIRECT LENDERS (TIER 1) can write Reverse
    Mortgages in North Carolina!!!!!!(PROTECTIONISM) WELLLLLLL, guess who is headquartered in North Carolina? YESSSSS, Bank OF AMERICA. Wonder if their State lobbyist(s) had anything to do with that law?
    Just think what this would mean Nationwide if every State in the Union took such an approach!!!!! Where is HUD/FHA in all this?

  • Dear The Critic: The “protectionism”, it seems to me, is designed for the benefit of in-state banks and all other Tier-1 Companies, not Seniors. I would think HUD/FHA HECMS come under the heading of Interstate Commerce; thus, HUD/FHA should play a leading roll in
    stopping this unfortnuate development. By the way, the first question I ask the lady in this case was “Did she mind working by mail?” She said “No, as long as you know what you are doing.” We both laughed and I said “Being a Senior, I know I may not know the answer to all of you questions but I’m sure I can find someone who will.” Next, I asked her would she be more comfortable working with someone locally.
    She said “”No.” and we started the Application process. I assure you if she had answered “Yes” to either question, I would have thanked the Lady for her time and said Goodby. I detest selfishness in any form. In my opinion, this is the true crux of the problem.

  • Dear The Critic: The “protectionism”, it seems to me, is designed for the benefit of in-state banks and all other Tier-1 Companies, not Seniors. I would think HUD/FHA HECMS come under the heading of Interstate Commerce; thus, HUD/FHA should play a leading roll in
    stopping this unfortnuate development. By the way, the first question I ask the lady in this case was “Did she mind working by mail?” She said “No, as long as you know what you are doing.” We both laughed and I said “Being a Senior, I know I may not know the answer to all of you questions but I’m sure I can find someone who will.” Next, I asked her would she be more comfortable working with someone locally.
    She said “”No.” and we started the Application process. I assure you if she had answered “Yes” to either question, I would have thanked the Lady for her time and said Goodby. I detest selfishness in any form. In my opinion, this is the true crux of the problem.

  • Looks like the insurance companies have won. They can sell seniors long care that in many cases will not help them examples 12 month waiting period to get benefits, not paying enough to pay actual cost. Then life policy many are term policies with seniors living longer than the term. renaming annuities which has been bad for seniors ccosting many seniors money because they are borrowing cash to purchase and when need money they have to pay a surrender charge up to 15% Remember you don’t borrow money to try to make money as it never works. Lets keep insurance companies away from our borrowers unless they realy know what theuy are doing. Maybe we need counsling for insurance products because of the complexety of the products.

    as far as the the life of the industry orginators are going to find it harder to stay in business. by going to a state license is a become loan orginators costing us more money and many companies will not make it.a mortgage broker business in florida will cost about 625.00 Brokers will be paying more to be in business as of JULY 1,2009 we go to national licensing but only good for your state. new testing for everyone at a cost of 295.000 plus preparing for test cost. then there is a background check and credit report and refinger printing every year, renewing licensing ever year. Except if your a bank then you don’t have to worry about all this. NRMLA how about som e help. Did not hear any word from NRMLA about this problem>

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