Chart of the Day: Most Popular Payment Plan for HECM Borrowers?

NewImage.jpgWhile we already know that borrowers are overwhelmingly choosing the fixed rate product, but what about the ARM product? 

The latest in our Chart of the Day series looks at what type of payment plan reverse mortgage borrowers choose on adjustable rate reverse mortgages.

According to data from Reverse Market Insight, younger borrowers overwhelmingly choose the line of credit.  In fact, less than 8% of HECM ARM borrowers in their 60s select one of the four monthly payment options (excluding LOC).  The chart also shows as borrowers get older, the more they choose a modified term payment.  For borrowers that reach 100 years old, 32% of the borrowers select a monthly payment option.

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To see a larger image of the chart above, click here.  For the full report check out the link below.

Reverse Mortgage Borrower Analysis, Part 2

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  • RWYNYC,rnrnReverse_Stash was great at calling me ignorant and then spending two paragraphs stating the obvious. Unfortunately it had absolutely nothing to do with the concluding paragraph in the RMI report or my comment. Maybe you can do better?rnrnIt seems your opinion differs from mine. You are free to tear my comment from limb to limb. If you believe that the industry has reached the apex of its marketing and advertising potential with HECMs then stand up and say so. You know what you want to say about your vision for the industry as to marketing and advertising, so do so.

  • Nice Job Reverse_StashnnI replied to the critic also, but I guess I was a little bit more harsh, and they would not post my reply.nnHow anyone could possibly complain about the industry right now is beyond me. Yet the same few posters are always commenting at the end of every article.

  • Reverse_Stash,rnrnFor once you let your guard down. Usually you state some meaningless platitude about me before you attack. Thank you for saving the space.rnrnSo you believe that after twenty-one years, we should be taking pride about our achievements? Break out the trophies, start the engraving, and uncork the champagne. It is time to celebrate. (Don’t buy one for me. Please give the money to a needy senior.) With little competition from any other product, I guess a 20% penetration of all mortgages held by those 62 and over should be taken with great pride. Oops, I guess it isnu2019t quite 20%, is it? rnrnIn that length of time, many are born and graduate from Harvard, Yale, Cal Berkeley, MIT, Cal Tech, and other universities of renown. Some have even obtained medical and graduate degrees from those universities in that same length of time. Now those are some achievements to take pride in. rnrnIt is NOT you but rather the attitude you express which provides the environment for that virus to grow. Yes, it is the virus which accounts for a great deal of the lack of penetration to date.rnrnIf you are proud about such meaningless accomplishments, then be proud. In my time in this industry we have produced close to 80% of all HECMs ever originated. I came into the industry 15 years AFTER it started. It took a little lender who went broke attempting to get the industry off the ground to get us there. Now the leaders in that company took real risk. Risk you and I will probably never experience but that is OK; they probably took too much risk.rnrnYou are good at excuses. Are you as good about leading the industry into the clouds? I am not trying to lead but to call the leaders in marketing and advertising to do that. Complacency never takes anyone to the next level. It is the virus which produces the glass ceiling in this industry. You are doing your best to convince me it not only fills your veins but is spreading through you to others.rnrnThere is a way to save the pain you descibe; just don’t read what I write. For you it seems about as smart as stepping in front of a speeding car. After all, last I checked this is still a free country.

  • Akoolkat (but really very, very hot),rnrnFor several years the stock owners in Laguna Woods did have a reverse mortgage available to them. Most did not like it (I don’t blame them) so failed to avail themselves of it until it was too late.rnrnMaybe just maybe the right person might read these comments and respond to you but in actuality, it seems the activist stock owner folks in Laguna Woods have worn out their welcome mat at HUD National Office. Now you are using these comments to go after the perceived injustice you believe has occurred at Laguna Woods.rnrnThere are over 6,000 stock holders at Laguna Woods. If you got a $5 contribution from each stockholder you would have a legal fund that would be much more effective than these comments. Why not try that? No doubt you have.rnrnImagine, just imagine how effective that would be if all 400,000 national coop stock owners made a $5 contribution. Now your legal fund would be over $2,000,000. You could do a whole lot with that and it would be far less cost than converting to condos. Imagine, just imagine the increased value a small $5 investment could bring each of you.rnrnTaking legal action is probably far more effective than pleading on this thread of comments. Be careful how hard you pursue this. You might get a Mortgagee Letter but not one we in our industry or you like.rnrnJust remember the sage advice in the “Cool” lyrics from West Side Story: “…Easy does it, Turn off the juice, boy, Just play it cool, boy, Real cool.”

  • Regguy1 and Nick,rnrnPlease look at the report. The purpose of the report is expressed at its beginning and at its end. RMI and RMD have been faithful to discuss and even question the overwhelming selection of fixed rate HECMs. Why isn’t there room in these blogs to discuss things other than possible “steering” and fixed rate HECMs?rnrnIt is not wrong for these questions to be brought up but they are out of place in this rare type of article, report, and thread. I appreciate the variety of reporting which RMD provides.

  • To “The_Critic”: Never have I had the painful experience of reading so many words that only end up highlighting a poster’s ignorance of today’s reality. The simple truth is, as an industry, we are working with what we got! What we have is a lending program that is 99.9% dominated by HUD, with a secondary market that is as of yet unwilling to take the bold move into proprietary products. Rightfully so – the historical knowledge necessary to create accurate forecasts for this product line are minimal, the appetite for risk is non-existent and there is no desire to develop new programs and expensive marketing campaigns in a time when origination volume is down.rnrnGet your head out of the clouds for two minutes and realize that this industry has worked hard to get to this point and should be applauded for our steadfast efforts – not “The_Critic”sized for lack of “imagination”.

  • Nick,rnExactly. I think the first line should be changed to “borrowers are overwhelmingly steered into choosing the fixed rate product”. This WILL have a dramatic effect on our industry.

  • The seniors in stock co-operative units have NO CHOICE as we are still waiting for HUD to implement the HECM for co-ops they have been stalling on since JUly 2008 when HERA bill was signed into law. We are the ones needing this product and are being forced to sell our homes–WHERE IS HUD?

  • The RMI report ends with: u201cSo what does all this mean? We suspect that many will see product development opportunities and others likely see sales and marketing implications. Weu2019re as interested as everyone else to see what this means for our market, but the resounding bottom line remains that the reverse mortgage market is in great need of market segmentation and diversity in our approaches to growing the business.u201drnrnThe problem with our industry is we lack marketing imagination and originality. HECMs are mortgages of last resort because we market and advertise them that way; it is the virus that runs through the marketing and advertising veins of our industry. Here the exceptions prove the rule. To this day one can still read HECM originators calling former Senator Fred Thompson and Robert Wagner u201cshillsu201d because they actually have the nerve to earn compensation from providing their image and voice to promoting and explaining reverse mortgages. Yet it is the imaginative celebrity marketing of Senior Lending Network that helped elevate our product to the heights we saw in 2005-2008.rnrnIf the HECM Saver is relegated to abysmal failure, we have no one to blame but ourselves. When we read originators exasperatingly question what can be done with Savers if traditional HECMs are already being offered at u201czero cost,u201d this shows how unimaginative our advertising force really is. There is no such thing as a u201czero costu201d HECM. What is the matter with reducing interest rates so that a lower rate becomes the differentiating benefit of a Saver?rnrnNow we come to what is the true problem in the industry, too little diversity and relatively no market segmentation in our marketing and advertising. When I came into the industry, age segmentation was accomplished through the pictures we used in our advertising, not its message. It was as if the age of the senior had little impact on thinking or goals just on how seniors viewed themselves. While we should not lessen our efforts in reaching u201cneedyu201d seniors, we at the same time should be reaching out to those who are not, even segmenting them by age and their identifiable objectives. Even the categorization of seniors by health status and their outgoing nature and abilities is a trap. Focus and thinking change with age. Focus and outlook are also different based on economic status.rnrnToday, the HECM marketplace resembles the proprietary market just a few short years ago. There is finally product diversity and interest rates based on lower upfront costs but we seem to be lost as to how to present our new and improved situation.rnrnLyn Link came up with a phenomenal idea about targeting charities but the timing and structure were wrong. For every idea like Lynu2019s there are 10,000 or more complaints about change. Where are our innovators and pioneers? Will they have failure? You bet but there is always another day with hopefully a new and better idea. rnrnForget about industry unity when it comes to marketing and advertising. What we need is diversity, segmentation, imaginativeness, and full compliance. We can expand our market but only if we choose to. Here is where marketing leadership and courage step up. When it comes to HECMs, the last time we saw anything really imaginative in marketing is the first time Jerry Orbach stepped before the cameras to tell seniors about reverse mortgages and it was sent out to interested seniors on video tapes (no not DVDs). Letu2019s grab the bull by the horns or be ready to slowly sink into the sunset. With origination volume already low and possibly lower volume for HECM Standards starting in October, now is the time to dance to a different drummer with a slightly different beat.rn

  • The RMI report ends with: u201cSo what does all this mean? We suspect that many will see product development opportunities and others likely see sales and marketing implications. Weu2019re as interested as everyone else to see what this means for our market, but the resounding bottom line remains that the reverse mortgage market is in great need of market segmentation and diversity in our approaches to growing the business.u201drnrnThe problem with our industry is we lack marketing imagination and originality. HECMs are mortgages of last resort because we market and advertise them that way; it is the virus that runs through the marketing and advertising veins of our industry. Here the exceptions prove the rule. To this day one can still read HECM originators calling former Senator Fred Thompson and Robert Wagner u201cshillsu201d because they actually have the nerve to earn compensation from providing their image and voice to promoting and explaining reverse mortgages. Yet it is the imaginative celebrity marketing of Senior Lending Network that helped elevate our product to the heights we saw in 2005-2008.rnrnIf the HECM Saver is relegated to abysmal failure, we have no one to blame but ourselves. When we read originators exasperatingly question what can be done with Savers if traditional HECMs are already being offered at u201czero cost,u201d this shows how unimaginative our advertising force really is. There is no such thing as a u201czero costu201d HECM. What is the matter with reducing interest rates so that a lower rate becomes the differentiating benefit of a Saver?rnrnNow we come to what is the true problem in the industry, too little diversity and relatively no market segmentation in our marketing and advertising. When I came into the industry, age segmentation was accomplished through the pictures we used in our advertising, not its message. It was as if the age of the senior had little impact on thinking or goals just on how seniors viewed themselves. While we should not lessen our efforts in reaching u201cneedyu201d seniors, we at the same time should be reaching out to those who are not, even segmenting them by age and their identifiable objectives. Even the categorization of seniors by health status and their outgoing nature and abilities is a trap. Focus and thinking change with age. Focus and outlook are also different based on economic status.rnrnToday, the HECM marketplace resembles the proprietary market just a few short years ago. There is finally product diversity and interest rates based on lower upfront costs but we seem to be lost as to how to present our new and improved situation.rnrnLyn Link came up with a phenomenal idea about targeting charities but the timing and structure were wrong. For every idea like Lynu2019s there are 10,000 or more complaints about change. Where are our innovators and pioneers? Will they have failure? You bet but there is always another day with hopefully a new and better idea. rnrnForget about industry unity when it comes to marketing and advertising. What we need is diversity, segmentation, imaginativeness, and full compliance. We can expand our market but only if we choose to. Here is where marketing leadership and courage step up. When it comes to HECMs, the last time we saw anything really imaginative in marketing is the first time Jerry Orbach stepped before the cameras to tell seniors about reverse mortgages and it was sent out to interested seniors on video tapes (no not DVDs). Letu2019s grab the bull by the horns or be ready to slowly sink into the sunset. With origination volume already low and possibly lower volume for HECM Standards starting in October, now is the time to dance to a different drummer with a slightly different beat.rn

  • The seniors in stock co-operative units have NO CHOICE as we are still waiting for HUD to implement the HECM for co-ops they have been stalling on since JUly 2008 when HERA bill was signed into law. We are the ones needing this product and are being forced to sell our homes–WHERE IS HUD?

    • Akoolkat (but really very, very hot),rnrnFor several years the stock owners in Laguna Woods did have a reverse mortgage available to them. Most did not like it (I don’t blame them) so failed to avail themselves of it until it was too late.rnrnMaybe just maybe the right person might read these comments and respond to you but in actuality, it seems the activist stock owner folks in Laguna Woods have worn out their welcome mat at HUD National Office. Now you are using these comments to go after the perceived injustice you believe has occurred at Laguna Woods.rnrnThere are over 6,000 stock holders at Laguna Woods. If you got a $5 contribution from each stockholder you would have a legal fund that would be much more effective than these comments. Why not try that? No doubt you have.rnrnImagine, just imagine how effective that would be if all 400,000 national coop stock owners made a $5 contribution. Now your legal fund would be over $2,000,000. You could do a whole lot with that and it would be far less cost than converting to condos. Imagine, just imagine the increased value a small $5 investment could bring each of you.rnrnTaking legal action is probably far more effective than pleading on this thread of comments. Be careful how hard you pursue this. You might get a Mortgagee Letter but not one we in our industry or you like.rnrnJust remember the sage advice in the “Cool” lyrics from West Side Story: “…Easy does it, Turn off the juice, boy, Just play it cool, boy, Real cool.”

  • Nick,rnExactly. I think the first line should be changed to “borrowers are overwhelmingly steered into choosing the fixed rate product”. This WILL have a dramatic effect on our industry.

    • Regguy1 and Nick,rnrnPlease look at the report. The purpose of the report is expressed at its beginning and at its end. RMI and RMD have been faithful to discuss and even question the overwhelming selection of fixed rate HECMs. Why isn’t there room in these blogs to discuss things other than possible “steering” and fixed rate HECMs?rnrnIt is not wrong for these questions to be brought up but they are out of place in this rare type of article, report, and thread. I appreciate the variety of reporting which RMD provides.

  • To “The_Critic”: Never have I had the painful experience of reading so many words that only end up highlighting a poster’s ignorance of today’s reality. The simple truth is, as an industry, we are working with what we got! What we have is a lending program that is 99.9% dominated by HUD, with a secondary market that is as of yet unwilling to take the bold move into proprietary products. Rightfully so – the historical knowledge necessary to create accurate forecasts for this product line are minimal, the appetite for risk is non-existent and there is no desire to develop new programs and expensive marketing campaigns in a time when origination volume is down.rnrnGet your head out of the clouds for two minutes and realize that this industry has worked hard to get to this point and should be applauded for our steadfast efforts – not “The_Critic”sized for lack of “imagination”.

    • Reverse_Stash,rnrnFor once you let your guard down. Usually you state some meaningless platitude about me before you attack. Thank you for saving the space.rnrnSo you believe that after twenty-one years, we should be taking pride about our achievements? Break out the trophies, start the engraving, and uncork the champagne. It is time to celebrate. (Don’t buy one for me. Please give the money to a needy senior.) With little competition from any other product, I guess a 20% penetration of all mortgages held by those 62 and over should be taken with great pride. Oops, I guess it isnu2019t quite 20%, is it? rnrnIn that length of time, many are born and graduate from Harvard, Yale, Cal Berkeley, MIT, Cal Tech, and other universities of renown. Some have even obtained medical and graduate degrees from those universities in that same length of time. Now those are some achievements to take pride in. rnrnIt is NOT you but rather the attitude you express which provides the environment for that virus to grow. Yes, it is the virus which accounts for a great deal of the lack of penetration to date.rnrnIf you are proud about such meaningless accomplishments, then be proud. In my time in this industry we have produced close to 80% of all HECMs ever originated. I came into the industry 15 years AFTER it started. It took a little lender who went broke attempting to get the industry off the ground to get us there. Now the leaders in that company took real risk. Risk you and I will probably never experience but that is OK; they probably took too much risk.rnrnYou are good at excuses. Are you as good about leading the industry into the clouds? I am not trying to lead but to call the leaders in marketing and advertising to do that. Complacency never takes anyone to the next level. It is the virus which produces the glass ceiling in this industry. You are doing your best to convince me it not only fills your veins but is spreading through you to others.rnrnThere is a way to save the pain you descibe; just don’t read what I write. For you it seems about as smart as stepping in front of a speeding car. After all, last I checked this is still a free country.

  • Nice Job Reverse_StashnnI replied to the critic also, but I guess I was a little bit more harsh, and they would not post my reply.nnHow anyone could possibly complain about the industry right now is beyond me. Yet the same few posters are always commenting at the end of every article.

  • RWYNYC,rnrnReverse_Stash was great at calling me ignorant and then spending two paragraphs stating the obvious. Unfortunately it had absolutely nothing to do with the concluding paragraph in the RMI report or my comment. Maybe you can do better?rnrnIt seems your opinion differs from mine. You are free to tear my comment from limb to limb. If you believe that the industry has reached the apex of its marketing and advertising potential with HECMs then stand up and say so. You know what you want to say about your vision for the industry as to marketing and advertising, so do so.

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