Following the recent passage of legislation in Texas that allows for lenders to complete reverse mortgage for purchase transactions, several lenders, including Generation Mortgage have begun to offer the product to qualifying Texans.
The product is currently being offered by several lenders, following the go-ahead granted by the Department of Housing and Urban Development after the product passed through the state’s legislature.
“After the referendum was passed, the industry worked with various stakeholders around Texas to get new documents and policies approved,” said Scott Norman of Austin-based Sente Mortgage, who led industry groups through the passage. “That process has been completed and I am pleased to see that lenders are now taking applications.”
Texas was the last state to offer the Home Equity Conversion Mortgage for Purchase due to homestead law under its state constitution.
A recent vote in favor of a constitutional amendment made the loan available for the first time.
Generation says it is expecting strong demand for the loan type based on general reverse mortgage demand in Texas.
“Due to Texas’ conservative homestead laws, conversion mortgages first became available in the state in 2000, which was much later than in many other areas of the country. However, after just 13 years, Texas is now the second-largest HECM producing state and represents nearly 9 percent of the market,” said Generation CEO and President Colin Cushman. “That type of growth shows there is significant demand for HECM products in Texas, and with almost a quarter of the state’s homeowners aged 65 or older, we anticipate that the HECM for Purchase product will be quite popular among seniors who are looking to retire to a smaller home or to a different part of the state. This is a time of great opportunity – both for Texas residents and for our company.”
In light of that opportunity, Generation has recently hired a new branch manager to oversee its Texas operations, as well as seven loan officers to bring a combined 60 years of reverse mortgage experience.
Over the last few months, the company has rolled out a new online platform and website, nu62, to market and educate across the reverse mortgage consumer market.
Written by Elizabeth Ecker