HUD Publication Delves into Reverse Mortgage Details, Benefits

The most recent edition of Department and Housing and Urban Development publication Cityscape takes a detailed look into reverse mortgages via six in-depth articles.

Published three times a year by the Office of Policy Development and Research (PD&R) of the U.S. Department of Housing and Urban Development, the current Cityscape edition explores recent reverse mortgage research, Home Equity Conversion Mortgage program changes, data, research and more, outlining some of the program’s recent challenges, as well as its merits for a growing senior demographic. [The publication notes in a disclaimer that the opinions expressed in the articles are those of the authors and do not necessarily reflect the views and policies of HUD or the U.S. government.]

“As the United States experiences an increase in life expectancy and population aging persists as a profound demographic trend for the country, HECM will continue to be an important source of funding for senior homeowners seeking to access their housing wealth and age in place,” write authors Edward J. Szymanoski, Alven Lam and Christopher Feather. “HECM will continue to serve its essential role as a supplement to income for people of advanced age seeking alternative ways to maintain their standard of living through advancing the financial sustainability of the HECM insurance and HMBS programs.”

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In one article, recent research conducted at The Ohio State University is detailed. In another, the reverse mortgage market in Japan is explored.

In total, the articles span an exploration of reverse mortgage securities, borrower protections, a snapshot of the HECM program, and insight into not only the need for reverse mortgages, but also some of the challenges they have faced.

“Although at least three factors point to the potential for growth in the number of new HECM mortgages originated, challenges persist and many eligible homeowners remain reluctant,” write authors George Carter III and Joshua Miller. “The reluctance is due to several factors, including the complexity of the program, the perception that a HECM loan is a last resort, and a desire to leave the home as an inheritance (CFPB, 2012). These factors must be considered as well. The potential growth must be managed and strong consumer protections enforced to ensure the viability of the HECM program in the future.”

View the Cityscape edition.

Written by Elizabeth Ecker

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