In a week that saw storm clouds gathering over the Department of Housing and Urban Development’s budget and new HUD Secretary Ben Carson generating controversy that had nothing to do with housing, RMD’s readers focused on a Q&A from researchers who say older Americans are still afraid of tapping into their home equity, a look at how a “silent generation” may be developing among reverse mortgage borrowers, and Retirement Funding Solutions’ path toward topping the Home Equity Conversion Mortgage for Purchase endorsement rankings after only 18 months in business.
In case you missed them the first time, here are the top five stories by traffic on RMD this week:
Urban Institute Researchers on Who’s Afraid of Reverse Mortgages — RMD readers carried on a lively discussion in the comments section of this spirited discussion with Karan Kaul and Laurie Goodman, researchers from the Urban Institute who recently explored the reasons why Americans aren’t using their home equity to supplement their retirement incomes. Fear and confusion top the list, and Kaul and Goodman also provided some interesting and potentially revolutionary suggestions for the future of the HECM program along the way.
A Reverse Mortgage Divide Grows As Borrower Motives Change — Anecdotal evidence from a reverse mortgage originator in the Washington, D.C. suburbs might be showing that there’s an age gap growing in the HECM market, as borrowers either take the line of credit soon after turning 62, or wait until facing immediate economic need in their 80s.
RFS Shares Blueprint for HECM for Purchase Success — Executives from the San Diego, Calif.-based Retirement Funding Solutions discussed how they came to be the dominant player in the HECM for Purchase program, building their brand on a combination of realtor/builder education and closing speed.
Financial Assessment Gives New Shape to Reverse Mortgage Underwriting — In the post-FA world, underwriters are spending more time on each file and investigating extenuating circumstances, such as divorce, hospital stays, and property repairs. But does this mean they’re able to underwrite fewer files as a result?
WaPo: Trump Administration Mulling $6 Billion in HUD Cuts — The HUD budget proposals leaked to The Washington Post didn’t mention the HECM program, but the preliminary plans showed that the Trump administration and Carson are serious about slashing spending on domestic programs. Section 8, public-housing maintenance projects, and community development initiatives would all be on the chopping block if the proposals became reality, but Carson and various other officials cautioned that the 14% cut to the HUD budget was merely an internal starting point and not a firm policy.
Reverse Mortgages Around the Web
Reverse mortgages: A few benefits, but use caution — RMD reader Larry Waters, a senior reverse mortgage consultant at Resolute Bank, sent along this article from his local paper, The Spokesman-Review of Spokane, Wash. Teased at the very top of its Sunday, March 6 front page, the article attempts to strike a balanced pose but ultimately falls on the side of caution and gloom; despite some positive words from a mortgage professional, the piece is heavy on scare quotes.
“When commercials say, ‘All will be good,’ to me, this should be your last resort,” Washington state assistant attorney general Julia Dooris McGann told the Spokesman-Review, citing American Advisors Group commercials that “often depict” Tom Selleck and Fred Thompson — though the paper seems to be unaware that Thompson, a former Republican U.S. senator from Tennessee and actor on NBC’s “Law and Order,” died in 2015 and thus can no longer appear in new advertisements whether AAG wants him to or not. “There are some circumstances under which reverse mortgages make sense, but they’re rare,” she said.
“The article paints a grim picture of RM,” Waters wrote in his email. “It’s like a step backwards for my area.”
Remember, if you see a story in your local media — in print, on television, or online — that mischaracterizes HECMs, always feel free to drop me a line so it can appear in RMD’s Friday Round-Up.
Are You Wrong About Reverse Mortgages? — Steven Cooley, the AVP of digital marketing for Finance of America Reverse, takes to the ConsumerAffairs blog to ask readers if everything they know about reverse mortgages is wrong. Calling on consumers to do research before jumping to preconceived conclusions, Cooley writes, “Reverse mortgages have gone through many changes and variations since the time it was introduced to the public. We know you’re smart. We respect your knowledge and wisdom.”
Selling by Educating: Lessons Learned at RMF — Huffington Post contributor Naphtali Hoff talks to Reverse Mortgage Funding president David Peskin about how his company approaches HECM marketing, especially given the not-so-sterling past of the product; Hoff writes that many consumers consider reverse mortgages to be a “bank grab” that will eventually leave them out on the street. Peskin discusses RMF’s emphasis on the “flexible payment” option, which RMD covered last month, as well as the company’s educational outreach initiatives.
Written by Alex SpankoPrint Article