In February 2018, Denver, Colorado, snagged the number 2 spot on LendingTree’s list of cities with the highest usage rates of reverse mortgages. The demand for Home Equity Conversion Mortgages (HECMs) was so high, in fact, that the Denver Business Journal speculated that it could have contributed to the city’s low inventory of available properties for sale.
But how is the industry in the Centennial State faring today?
- Total Colorado Population: 5.7 million (U.S. Census)
- Senior Population (Ages 65 and up): Approximately 627,000 (11% of population)
- Average Home Value: $380,200 (Zillow)
- Year-over-year Home Price Appreciation: 5% (Zillow)
So far this year, things are looking up, says Bruce Simmons, reverse mortgage manager for American Liberty Mortgage, Inc. in Denver.
“I am hoping to close about the same amount of business that I did last year or possibly a little more if rates continue to stay low,” he says.
The long-term future holds even more promise.
By 2030, the Colorado State Demography Office predicts that the 65-and-older population will rise to 1.27 million, a 77% increase from 2015. Much of this growth comes from the state’s residents who are aging in place, according to US News, which named Colorado the best state to age in America in 2017.
“My borrowers range in age from 62 to 104,” says Donald Opeka, president of Orion Mortgage, Inc. in Broomfield, Colo. “Many of these people came here for the energy business or government work in the 1970s and are still here.”
But people and properties are very different in Colorado.
On any given day, Simmons says he could see a simple Denver ranch home for $500,000, then a $250,000 barn on a 2-acre lot right outside of town, then a $1 million property in the mountains an hour west of Denver.
“I could be talking with a Boulder hippie one day and a very chic Denver socialite the next,” Simmons says.
Though their ages, income levels, housing types and lifestyles vary greatly, plenty of Colorado’s residents share something in common: misinformation about reverse mortgages.
“There is still the constant battle to educate people about the facts,” Simmons says. “There is not nearly the amount of negative information about reverse mortgages these days, but that is still what people remember.”
And it’s not just about the product’s reputation – it’s also about whether they’ll need a reverse mortgage at all.
“As I talk to people at various senior events, most people are in denial about the fact they will need a reverse mortgage,” Opeka says. “I have to remind them that Social Security does not work with a mortgage payment or market rent. A person can only survive on Social Security if they have no mortgage payment.”
But still, this year’s figures remain steady, and as the public perception of the product improves, Colorado originators are hoping their numbers will too.
“I think we are on the right track,” Simmons says. “But as loan originators, we have to work to continually get the word out that this is a great program, no matter what market we are working in.”
Written by Meredith Landry