National Association of Realtors: What to Make of Reverse Mortgages?

A National Association of Realtors (NAR) blog post published Thursday aims to inform its members of Home Equity Conversion Mortgages by asking: What to Make of Reverse Mortgages?

NAR is offering an upcoming webinar on June 28 including a panel of National Reverse Mortgage Lenders Association representatives, to answer questions the Realtor market might have, and to talk about the HECM for Purchase product. 

“With baby boomers now well into their retirement years and many of them with elderly parents who are ready to move into a nursing home or assisted living facility, the likelihood of you listing or selling a home with a reverse mortgage is pretty good,” NAR writes. 

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With more reverse mortgage borrowers on the horizon, NAR tells Realtors to be prepared for situations where they may be listing a home for sale that had a reverse mortgage. It could mean managing expectations about the home condition, which is generally good for FHA-insured reverse mortgages, NAR says, or working with the children of a reverse mortgage borrower

“In short, you can expect all sorts of perplexities surrounding a transaction in which children are selling the house and trying to sort things out themselves,” NAR writes. 

Reverse mortgage lenders see the opportunity to have a dialogue with the Realtor community and help to inform consumers about the HECM for Purchase as well. 

“If realtors don’t understand the benefit to their client and themselves, they are not going to bring up the HECM for Purchase,” says Jerry Tomlin, a NRMLA member who will participate on the Webinar. Tomlin also notes that many Realtors have a senior-specific designation, Seniors Real Estate Specialist®, or SRES. 

The webinar will include input from NRMLA’s Tomlin as well as Peter Bell, president and CEO and Steve Irwin, executive vice president. 

“NRMLA has a history of working with organizations with shared interests—including other housing trade associations—to educate their members about reverse mortgages,” said Peter Bell, NRMLA president and CRO. “We have had an ongoing dialogue with the National Association of Realtors for years, presented a webinar for them previously on HECM for Purchase and are delighted to join them again for the June 28th webinar.”

Read the blog post from NAR

Written by Elizabeth Ecker

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  • Per the SRES office at NAR, there are currently about 15,000 real estate licensees in the US and Canada who hold this designation.  Considering there are over 400,000 real estate licensees in California alone, the SRES designation is fairly unheard of in the real estate community especially when one considers that those over 60 own over 20% of the homes in the US; however, the size of its membership dwarfs the number of originators in our own industry.

    Why our industry goes out of its way to promote this product is unclear.  It only can do two things which a traditional HECM may not be able to do:  1) allow a senior to purchase a more costly home and 2) saves on duplicative closing costs.

    The considerations for the purchase product should be no different than for a traditional HECM yet time and again seniors take the fixed rate product supposedly because they can hold onto more of their cash.  It seems performing more than one significant transaction at a time and too many seniors lose sight of commonsense.

    If almost seniors say when buying a property with a HECM “I do not want to sink more money into the purchase than I absolutely must,” why are the same percentage not saying “I want to leave as little of my equity as untapped as possible” when they get a traditional HECM?  Economically and financially there is no fundamental difference in a purchase or traditional HECM mortgage transaction yet the higher percentage of fixed rate HECMs originated in the purchase transaction are surprisingly higher.

    Until we have a specialized segment of originators solely focusing on the purchase product it will not only be an afterthought within the real estate community but also in ours as well.  Is the product a sleeping giant?  For now at least one word of that phrase seems appropriate; the purchase product is clearly sleeping.   

  • It’s great to see NAR taking this step forward…
    Right now there is a course being offered on Realtor University and The Learning Library, which are NAR’s online learning platforms, which just recently went to market. The class sells for $29.99 and it is already selling very well.
    It is a 3 hour class specifically designed for real estate agents on the topic of the purchase reverse mortgage. It is a very informative class that in most cases really opens the real estate agents eyes to how much potential this product has when listing or selling homes in the senior market.
    Of course I could be biased as I wrote the course and it is being offered by the American C.E. Institute via Security One Lending’s education business model… LOL
    The course is also available in a class room setting in several states and pending approval in 20+ more states and to date has been taught in Realtor organizations throughout Florida, California, Oregon and Ohio. It has met with incredible acceptance and continues to create new business on an ongoing basis.
    The Learning Library will be offering a free webinar in July for its tens of thousands of past and present student data base that will be a shortened 1 hour version of the 3 hour class. We are hoping this webinar will be very heavily attended and will really start a national trend of merging the real estate world and the reverse mortgage world, a merging that is long overdue…
    I do take exception to just one comment in this article, “In short, you can expect all sorts of perplexities surrounding a transaction in which children are selling the house and trying to sort things out themselves.”
    I am wondering why anyone feels those “complexities” are any different when a home had a reverse mortgage as opposed to a “forward’ mortgage.
    In any case, this is a great step forward for us all!

    • If you look at endorsements, the highest monthly total 
      of purchase HECMs to date  was September 2011 when it was only 188.  The total endorsements for April 2012 included MetLife and almost all of those HECMs were generated before its announced ditching of our industry; that was a marked increase for the fiscal year (highest month so far, 161 for January 2012) — all the way to 153 endorsements from 110 in March 2012.  May 2012 endorsement activity of purchase HECMs have yet to be provided by HUD.

      The proof is in the pudding.  So when are you predicting that monthly endorsements of purchases will reach 200 and stay above that number for longer than 3 months?  We know it will not before October 2012 but how soon after September 2012 will it be?  Throwing resources and time at this product is a commitment which few originators who are dependent on commissions can ill afford without some kind of timeline to a see a real return.

      For now, just call me The Doubting Cynic.  As Jerry McGuire declared at the top of his voice:  “Show me the money.”  Or maybe better stated for our industry:  “Show me the endorsements.”

      The cost of of unjustified adulation in this forum is cheap!!!

    • Michael, you mention that your class is available in a “class room setting”.  Where can I get a copy of this and am I as a reverse mortgage originator, able to teach this class to realtors??

  • Ladyforreverse,

    Security One Lending has acquired the rights to all of my classes and are now only being performed for S1L loan officers.
    If you would like to discuss this subject further please just give me a call.

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