A growing need for reverse mortgages should be met by a more vigorous outreach by lenders. That’s the thesis coming from those on the front lines.
John Brodey of Sequoia Pacific Mortgage in Santa Rosa, Calif., says he’s counted “4,600 senior homeowners alone [here] who are in default on their mortgages and on course to lose their homes. Many of them will require a more aggressive and innovative solution to closing the gap between principal balances and reverse mortgage proceeds,” asserts Brodey, adding for emphasis: “It is a national crisis in the making.”
And, yet, “we have penetrated less than two percent of the households eligible for a reverse mortgage [nationally],” figures Bart Johnson, Life Stages Financial, Inc., Newport Beach, Calif. “We need to think differently,” he declares, upping the ante. “I want to challenge our industry to think about the 23.2 million senior households that were eligible for the product at the end of [last year] – many of whom need help.” According to Johnson, that market “is only getting bigger, and will increase by something in excess of 13 percent, to 26.3 million eligible households five years from now.”
But, today, there is a serious need, says Sequoia Pacific’s Brodey, who reports generating “a list of 4,600 senior homeowners in California who were at least a month behind on their mortgage payments – and about half already had received NODs.” He reports sending a letter to everyone on the list and receiving “approximately 80 calls. After running the numbers in each case there was nothing I could do for any one of them,” he says. “They were all on track to lose their homes to foreclosure.”
So, the need is there but Bart Johnson says: “We are failing to deliver our product to the mass market – today’s products and practices will not get us there.”
Neil J. Morse has been a communications professional working in the mortgage finance industry for more than a decade. He can be reached at firstname.lastname@example.org