Falling property values, rising business costs, fraud and greater regulatory scrutiny are among the biggest changes affecting reverse mortgages today according to an op-ed article from Bob Yeary, CEO of Reverse Mortgage Solutions.
Where does that leave the reverse mortgage market? Clearly, the business is changing. Yet it can also be rewarding for those who are up to the challenge according to Yeary.
In addition to the social benefit, the fundamental financial logic behind future growth in the reverse mortgage business remains convincing. Currently, there are 34 million Americans aged 65 or older. By 2030, that number is expected to more than double, to 71 million, or 21% of the population. Moreover, there are presently more than 12 million seniors in the U.S. who own their homes free and clear, owning an estimated $4 trillion in equity. That is a lot of collateral to be tapped. What’s more, the industry has achieved only 2% market penetration.
So, there’s clearly a lot of room to improve, but for whom and how? The reverse mortgage business is still largely a “cottage” industry, with exceptions like Bank of America and Wells Fargo, and other big lenders are also starting to take notice. For example, Quicken Loans recently moved into reverse mortgages through One Reverse Mortgage, an existing company it acquired and retooled.
Read the rest at the link below.