Last August, the Mid-Atlantic region of the country outpaced all other regions in loan originations with a 28.2 percent increase in growth over the previous month, according to Reverse Market Insight.
But have originators throughout the area continued to build on that momentum?
- Total Mid-Atlantic Population: 57.3 million (U.S. Census)
- Senior Population (Ages 65 and up): Approximately 9.7 million (17% of population)
- Average Home Value: $273,283 (Zillow)
- Year-over-year Home Price Appreciation: 3.26% (Zillow)
The product’s popularity throughout the region, which includes Maryland, Delaware, Pennsylvania, Virginia, West Virginia, the District of Columbia, and parts of New York and New Jersey, has certainly grown, says Laurie MacNaughton, a reverse mortgage specialist at Atlantic Coast Mortgage in Washington, D.C.
“Though I still frequently encounter a ‘reverse mortgage is of the devil’ reaction, almost never do I meet homeowners who have never heard of a reverse mortgage,” she says. “That represents a big change over years past.”
But the Mid-Atlantic is very diverse in terms of wealth, debt, income, retirement assets, and beliefs among senior homeowners. The region also features large differences between property types, property ages and property values, according to Steve Broaddus, director of the reverse mortgage division of the Philadelphia-based Reverse Mortgage Team.
“Within miles of each other you can have a 200-year-old stone house on a 50-acre farm and a new construction community on small lots,” he says. “Housing values can swing in the millions of dollars within a short distance in parts of the region.”
So targeting the right client can be a challenge. The appraisal process in the rural parts of Pennsylvania, Maryland and Virginia can also present a challenge, Broaddus says.
“The lack of clarity regarding the HUD appraisal review creates more unknowns and often times more costs in these areas,” he says.
In the Washington, D.C., area specifically, clients expect a very high level of service and have a high knowledge base, MacNaughton says.
“The D.C. area is one of the most highly educated, most affluent areas in the nation,” she says. “Many, if not most, of my clients are working with wealth managers or estate attorneys, so they come with a certain understanding about the product.”
So the challenge there is in educating not just the client, but those who serve them, including real estate professionals, financial advisors and attorneys.
“Working to educate other business professionals who work with senior homeowners, so they can help create interest by understanding where a reverse mortgage can fit into a retirement strategy is more critical now than ever,” Broaddus says.
But through the development of new proprietary products, lenders in the Mid-Atlantic will be able to serve a more diverse clientele. And as reverse mortgages continue to grow in popularity, the region seems to be on track for a solid year.
“It appears to me as if 2019 will end up likely looking similar to 2018,” Broaddus says. “As long as the product remains somewhat consistent, I am excited to see what the long-term future holds.”
Written by Meredith Landry