Must-Read Reverse Mortgage Financial Planning Articles You Need This Year

Reverse mortgage news coverage continued in 2016, with both mainstream media outlets and professional trade publications coming around to the idea of using home equity for financial planning purposes. And for good reason, too.

This past year saw stories on a variety of financial planning topics, including the reasons that forced some advisers to take another look at reverse mortgages in retirement, and how new rules from Social Security Administration and the Department of Labor stand to impact reverse mortgages.

While the reverse mortgage industry still has ways to go in its efforts to educate more financial planners about the merits of home equity in retirement income planning, the year 2016 was another productive step in the right direction.

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Here are the top-10 most-read reverse mortgage financial planning articles of the last 12 months:

10. January 4 — Reverse Mortgages Will Change Retirement Planning in 2016

The retirement planning world saw a number of policy changes in the previous year that had implications for how retirees plan in 2016. One of the most important changes: the Financial Assessment and enhanced consumer protection rules for reverse mortgages, according to an article from Forbes written by Jamie Hopkins, associate professor of taxation at The American College in Bryn Mawr, Pennsylvania.

9. May 26 — Former Skeptics, These Financial Planners Now Accept Reverse Mortgages

There have been many changes to the Home Equity Conversion Mortgage program in the past few years, forcing financial planners who were once skeptical to now realize how these products can benefit their clients and, in some cases, their own businesses. Two financial planners, both self-admitted skeptics of reverse mortgages, chatted with RMD about why their view has changed on the product, and why one of them even went the extra mile and launched a mortgage broker business specializing exclusively on reverse mortgages.

8. October 18 — Why Financial Advisors Must Accept Reverse Mortgages in Retirement Planning

The negative perception surrounding reverse mortgages not only stunts the growth potential for these products to reach a wider consumer audience, but also deters financial planners from recommending the use of home equity for retirement income planning. This is a concept brought to the forefront in the book, “Reverse Mortgages: How to Use Reverse Mortgages to Secure Your Retirement,” published this year by Wade Pfau, professor of retirement income at The American College and director of retirement research at McLean Asset Management.

7. March 6 — Financial Planning Talking Points Every Reverse Mortgage Lender Should Know

Just like any relationship, whether emotional or professional, communication is integral to developing a meaningful connection that allows each of the parties involved to effectively understand the needs and wants of their partners. While the importance of meaningful communication may sound like a cover story worthy for the front pages of glam-mags like Cosmo and Vogue, this concept is critical for reverse mortgage professionals in their ongoing efforts to forge relationships with financial advisors and other retirement professionals.

6. March 21 — Advisers Get Crash Course on Reverse Mortgage Financial Planning Strategies

A webinar hosted by the Retirement Experts Network alongside The American College served as an educational session to teach advisers how they can fit home equity into a client’s retirement income strategy. During the session, advisers received an overview of how reverse mortgages work, including their eligibility requirements, various spending options and the different possible uses for HECMs.

5. September 12 — New Social Security Rules Play Into Reverse Mortgage Retirement Strengths

Changes to the Social Security program enacted this year are lending credence to reverse mortgages as a viable retirement income planning strategy, according to some retirement experts during a webinar hosted by the Retirement Experts Network. The webinar discussed how rules impacting Social Security claiming strategies, including “File and Suspend,” could offer an opportunity for retirees to incorporate a reverse mortgage into their retirement income planning strategies.

4. April 12 — Reverse Mortgages Are the Epitome of Retirement Planning Efficiency

Effective retirement planning allows investors to maintain their lifestyles while also preserving a greater legacy. When it comes to creating a retirement income plan that achieves both of these goals, reverse mortgages are the epitome of efficient planning, says one retirement income expert.

3. March 7 — Why One Financial Planner Launched His Own Reverse Mortgage Business

Recent rule changes and demonstrative research has helped some financial planners change their minds about the use of reverse mortgages in retirement planning. But while some have simply adopted a newfound liking toward these products, other newly enlightened planners are taking a more active approach to serve their clients’ reverse mortgage needs.

2. April 4 — New Rule Offers Opportunities for Reverse Mortgage, Financial Planner Relationships

A Department of Labor rule this year that amends the definition of fiduciary under the Employee Retirement Income Security Act of 1974 is thought to create opportunities for financial advisers and reverse mortgage professionals to form new relationships. Although the rule does not address reverse mortgages directly, its impact on financial services providers has implications for the use of home equity in retirement.

1. January 4 — Why This AARP Columnist Changed Her Mind on Reverse Mortgages

Thanks in part to various HECM program changes in recent years, reverse mortgages have been winning over everyone from financial advisers to community banks and the mainstream press, and even one nationally recognized personal finance commentator who changed her view on the product.

Over the course of an illustrious career, Jane Bryant Quinn has established herself as one of the nation’s most read and reliable voices for people trying to manage their money well. But it wasn’t until recently that she shifted her perception of reverse mortgages and the role they can play in retirement planning today.

There you have them—the top financial planning stories on reverse mortgages in 2016. Feel free to re-read, share and reference in your ongoing conversations about reverse mortgages and retirement.

Editor’s note: The top stories list is based on traffic data received on Reverse Mortgage Daily content compiled January 1, 2016 through the publication date of this article.

Written by Jason Oliva

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  • In the April 4th article, there is an enormous over assessment of what the DOL fiduciary rule, which does not even go into effect until later this year, will mean to our industry.

    That over assessment was made by an attorney who teaches at a financial services college. He stated: “The fiduciary rule is happening and it’s going to require conversations across industry silos, including reverse mortgages and home equity.”

    The fiduciary rule itself will not require any such result. DOL has no intention of regulating the use of personal assets nor the debts encumbering those assets. Even if DOL wants to require that conversation, it does not have the authority to do that on anything other than asset transactions they are legally mandated to oversee. The attorney is saying DOL is willing to go beyond its authority to force the financial services industry to incorporate our product in the advice they give. Nothing at DOL is further from the truth.

    This message of required conversations is bogus and mere hype.

  • I feel This article of Jason’s just reinforce the fact that there is a new market for us to be in. We have to recognize that the old methods of doing business can’t continue as it was. A good percentage of people we dealt with are not there anymore.

    I am not saying forget our ethical and fiduciary responsibilities or go after those in need of a HECM to improve their quality of life, on the contrary!

    I am only saying that since the implementation of FA, a portion of the market we once had is not out there anymore as I previously said, which in many ways is a very good thing. We did more harm to many of these people that were put into a reverse mortgage because they would not have qualified today. In fact, all we did was provide them a Band-Aid for the inevitable, which is being foreclosed upon!

    The point I am making, getting back on track is that the financial planner/advisor, small community banks, credit unions and other professional people and institutions are where we need to direct a great deal of our energy towards.

    However, as I have said many timed before, only because I have dealt with the institutions and people I am referring to, we MUST understand their world, first and foremost! Once we do that, then we can be effective in rolling our product into the service they offer their customers, members and clients!

    John A. Smaldone
    http://www.hanover-financial.com

  • A lot of negative comments below. The reverse mortgage program has saved my parents retirement.

    Myths:
    Expensive
    The bank owns the home
    Heirs won’t inherit anything

    We found comparison website, click quote save dot com, that found us a lender who charged $0 upfront fees (savings of $6k).
    There was no haggling involved just tell them you don’t want to pay any upfront fees.
    The title/ownership remains in my parents name and if home values increase I will inherit the remainder of the equity.

    My parents are saving $24k/yr by not having a mortgage payment, and I don’t have to worry about their financial situation. They don’t need my assistance, everyone wins.

    If home values decreases or they live for another 30 years I’m perfectly happy not inheriting any $ or the home. I just wanted them to have a comfortable retirement.

    Don’t believe all the negative comments without doing your research first. Like any other service and industry there are good lenders out there.

    Thank you all, and best of luck.
    Jessica

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