WAPO Columnists Sees Reverse Mortgages Popularity Growing in 2010

imageWashington Post writer Benny Kass makes his predictions for the new year in his Housing Counsel column.

Looking into his “crystal ball”, Kass sees good things for reverse mortgages in 2010:

Advertisement

Also in 2010, we will likely see reverse mortgages continue to grow in popularity, especially as more baby-boomers — who did not bother to save money in the past — are reaching e the eligibility age of 62, and realizing that their only asset is the house they live in. Now that major reforms have been instituted to curtail the abuses — and some of the high costs associated with reverse mortgages — it may be the right choice for more people.

I can’t speak for everyone, but it was encouraging to finally hear someone acknowledge the reforms and protections which have been implemented are doing something. 

What the new year and new decade will hold for housing market

Technorati Tags: ,,,,

Join the Conversation (11)

see all

This is a professional community. Please use discretion when posting a comment.

  • I is good to read some positive comments. Even though the concept may gain in popularity, it is hard to believe that volume will be up unless something is done to drastically change the principal limit situation.

  • If I had just heard of reverses, and the current principal limit was applied, I would still think this is a great program. For one thing, the borrower can't go by “what used to be”, but what is-now. They're not getting “less” money-the program just calculates it this way. It's still better than not getting to use any of the equity in their home. They weren't doing this 3, 6, or even 10 years ago, so they have nothing to compare to-in other words, they don't know about the reduced principal limit. Besides, it helps them retain more of their equity, since most reverses last only 5-7 years. And if reducing the principal limit helps investors happy, maybe that will help us retain this program for the future.

    • The main problem with the principle limit decrease is that many borrowers no longer qualify for a reverse mtg. I think it's over 70% of all r/m's are done to eliminate current mtg's and now, many of those seniors no longer qualify… so that is the main reason for the complaints of the principle limit reduction.

    • Many seniors I looked at for fixed rate HECMs certainly look like they would get less “money” if they got a FHA Case Number on 9/30/2009 or 10/1/2009. I sure would like to know how they would receive the same amount. It seems either you or I need some help on this matter. So why don't you explain why I am so wrong.

  • I was new to reverse mortgages in 2009, and I have watched the margins increase, values go down, principal limits decrease and now, new obstacles for 2010. The new counseling/testing requirements will cause many people to back off. And the use of national appraisal compaines will likely cause an increase in that upfront cost. I am not feeling as optimistic as Benny Kass of the Washington Post.

  • Those of us in the industry are often guilty of, to use a worn phrase, 'not seeing the forest for the trees.' ILUVRMS makes excellent points, and if we let our own disappointment with AVMs, NPLs et al show to our customers, we may well become the primary force driving them away.

    • REVGUYJIM,

      Pollyanna could not have said it any better.

      Now tell me what should I tell the seniors who call and tell me that the numbers I and my peers are giving them now are a lot less than they were a few months ago. Is it a figment of their imagination?

      You sound more like a sales management executive than an originator. I read the same kind of reasoning in the book of Exodus in the Bible regarding the making of bricks. Take away more “straw” but keeping the same amount of bricks. That worked then, or did it?

    • REVGUYJIM,

      Pollyanna could not have said it any better.

      Now tell me what should I tell the seniors who call and tell me that the numbers I and my peers are giving them now are a lot less than they were a few months ago. Is it a figment of their imagination?

      You sound more like a sales management executive than an originator. I read the same kind of reasoning in the book of Exodus in the Bible regarding the making of bricks. Take away more “straw” but keeping the same amount of bricks. That worked then, or did it?

  • REVGUYJIM,

    Pollyanna could not have said it any better.

    Now tell me what should I tell the seniors who call and tell me that the numbers I and my peers are giving them now are a lot less than they were a few months ago. Is it a figment of their imagination?

    You sound more like a sales management executive than an originator. I read the same kind of reasoning in the book of Exodus in the Bible regarding the making of bricks. Take away more “straw” but keeping the same amount of bricks. That worked then, or did it?

  • Critic,

    What I meant was simply that the reverse is still the only tool that allows equity from the home to be used without required monthly repayment, and while you and I are aware of what “used to be” the vast majority of the outside world is not. I'm no analyst, but it seems to me that if the principal limit was so high in the beginning so as to possibly put the investors at risk, perhaps it was too high in the first place. Maybe once these details have been adjusted, the reverse will have a better reputation and will be more accepted, allowing the LO's to actually be able to make a living.

string(110) "https://reversemortgagedaily.com/2010/01/07/wapo-columnists-sees-reverse-mortgages-popularity-growing-in-2010/"

Share your opinion