Reverse Mortgage Stakeholders Dispel Product Myths for Home Care Audience

Bridging two industries that have a shared interest in the ability of senior individuals to age in place, reverse mortgage stakeholders presented a webinar discussion last week to an audience of in-home care professionals. Largely focused on presenting the benefits of reverse mortgages for home care recipients, the panel also dispelled common myths around the product.

The Home Care Association of America (HCAOA), a primary trade association for the in-home caregiving industry, presented the webinar as part of an ongoing three-part series called “Using Home Wealth to Fund Home Care,” the goals of which are to provide tools so that people in the home care industry can discuss clients’ major asset: the home.

One of the purposes of the series is to illustrate how someone can use their home in “a safe way to finance the services that home care organizations provide,” said webinar moderator Shelley Giordano, founder and chair of the Funding Longevity Task Force at the American College of Financial Services at the top of the presentation.


The initial webinar in the series also featured Professor Jamie Hopkins, director of the New York Life Center for Retirement Income and a taxation professor at the American College of Financial Services, and Dr. Barbara Stucki, the principal at BRStucki Consulting and a colleague of Giordano’s at the Funding Longevity Task Force.

The panel focused on benefits as well as myths that can be helpful for home care professionals to discuss with their clients, with the first program having been designed to cover the basics of financing home care through the employment of a Home Equity Conversion Mortgage (HECM).

In terms of some of the common misconceptions associated with reverse mortgages, Professor Hopkins offered facts for the purpose of dispelling those myths, some of which include the idea that the bank owns the home; a borrower’s heirs always lose the home as inheritance; the set up fees are prohibitively high; the idea that there’s “no way out” of a HECM arrangement; and the thinking that a reverse mortgage is a “last resort.”

The question of why home care should maintain its viability for seniors, particularly if they wish to remain in their homes and not transfer to an assisted living facility of some kind was explored. Primarily, in addition to being beneficial for those wishing to stay in their homes, employing home care also benefits seniors themselves and the home care industry at-large, Stucki said.

The growing American senior population puts stress on long-term care needs, along with the fact that older people are both more likely to be homeowners themselves, while also being more likely to want to maintain their homeownership as opposed to relinquishing it by changing their residence to something like an assisted living facility, Hopkins detailed.

He then offered a hypothesis concerning the reason that more older Americans are not using home equity as an employable asset in funding their retirements, which includes bad press surrounding the reverse offering.

“They’re easy stories to write,” Hopkins said, describing a scenario in which a sympathetic senior who leaves their home after engaging in a reverse mortgage gets picked up by a news outlet.

“The reality of that situation usually surrounds the payment of property tax, and is not with the underlying mortgage,” he said.

A confluence of other factors also work against the reputation of the reverse mortgage, Hopkins said, going on to name factors such as peoples’ aversion to infomercials with celebrity endorsements, financial advisors being uneducated in relation to housing wealth and lines of credit, and a “misunderstanding” of how reverse mortgages have evolved over the course of their existence.

Hopkins also detailed the reasons for the HECM product’s legitimacy, detailing its insurance by the Federal Housing Administration, along with the requirement of mandatory counseling to ensure that a borrower understands every aspect of the loan before closing.

Shelley Giordano then gave the audience an overview of steps required to get a reverse mortgage, before providing sources of impartial information (like the Department of Housing and Urban Development booklet “Use Your Home to Stay at Home”) should a prospective borrower request it.

The webinar is the first in a series of topics relating to reverse mortgages and home care synergies. Detailed webinar information and registration links can be found at HCAOA’s dedicated webpage for the series.

Written by Chris Clow

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  • This is an interesting combination and use of this particular talent. The surprising member of this team is Hopkins since he is so competent and appealing to the financial community. As a senior advocate, Stucki is a natural with this group. Finally, Giordano does a terrific job as a moderator in almost any audience.

    There have been many different training programs in the hopes of increasing endorsement volume through the referrals of those in the financial and real estate industries. With 1) less than 17,500 endorsements in the last six months, 2) less than 24,200 endorsements in the last eight months, and 3) total endorsements of under 5,900 predicted for this and next month for total in ten months of less than 30,100 endorsements, can these programs be considered successful?

    There would be little doubt of the success of such programs if on October 1, 2019 secular stagnation had ended in fiscal 2019 due to large increases in the endorsement volume for fiscal 2019 but there seems to be no scenario in which that will occur. To get there fiscal 2019 endorsements would have to exceed 65,000. Right now the value of even the best of these programs must come under review.

  • Personally, I felt this article was great and it was very encouraging.

    I Fully agree with George on the credentials of Jamie Hopkins, Dr. Barbara Stucki and naturally Shelly Giordano. Sure could not find a better team to put this on!

    We talk about going after the professional sector as referral partners, “Home Health Care” providers are ideal partners! This article should motivate anyone to go after this market!!

    These three professionals made very good points as to why a reverse mortgage is right for this sector of seniors. Hopkins, Dr. Stucki and Shelly Giordano also pointed out the misconceptions of a reverse mortgage and did a great job dispelling many of these misconceptions.

    This is an article that any originator reading it, should keep in their folder and continually refer to it. Home Health Care Providers, an originator could make a good living by teaming up with many of them as referral partners.

    I will give you one better! Get yourself a home health care provider, an elder law attorney and yourself as the reverse mortgage expert and put on an educational workshop at your local library.

    In conjunction with that, simultaneously get your county or city to ratify it. Classify the workshop as a community service educational workshop. You will get free public service announcements in the local newspaper and even TV coverage on the workshop , all free! You will have one heck of a crowd and I will bet you, business will be coming your way, do you have what it takes to do it??

    John A. Smaldone

    • John,

      Your suggestions come from the successes of an era where such actions produced endorsements. I noticed endorsements were missing from your list of rewards as in the current environment, they should be.

      • George,

        Yesterday and today’s endorsements have nothing to do with what the originator of the future, future being today forward, should be doing about getting business in the door!

        With all due respect my friend, I purposelessly did not mention endorsements. You are right as far as what the impact of the lack of endorsements have done to the fund and the industry. You have said all there is to say about it better than anyone.

        The future and what the originators do to keep this industry alive is what concerns me the most right now George.

        Thanks you sir,


      • John,

        I am probably ignorant but I do not know how a reverse mortgage origination finds financial success and growth without achieving closings even if they are on salary. More and more HECM originators will continue leaving this industry if they fail to close a minimum number of reverse (or forward) mortgages.

        Perhaps you can enlighten my thinking. I remember the days when some in the industry told us with great gusto that we need to care for senior education and closings will come. Those days started coming apart on 9/30/2013 and accelerated on both 4/27/2015 and then again on 10/2/2017. I am not sure how 10/1/2018 change will impact closings but I hear those changes are once again lowering closings.

        What is the future you envision? How will MMIF losses end?

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