Despite being the last state to get into the reverse mortgage business, the Lone Star State counted its 50,000th reverse mortgage last week.
Since introducing the reverse mortgage option twelve years ago, Texas’ 50,000 reverse mortgage loans account for 8.8% of all reverse mortgages in the country. This now makes the state the second-largest market for the reverse product.
“This is a great occurrence for senior homeowners in Texas,” said Scott Norman, VP of Sente Mortgage’s Reverse Mortgage Division.
Norman—also a member of the National Reverse Mortgage Lenders Association Board of Directors—believes that reverse mortgages will continue to take on greater significance as a financial planning tool as homeowners are left to face uncertainties related to the stock market, expanding health costs and tax increases in the future.
Protective homestead laws and strict compliance standards embedded in Texas’ constitution have made reverse mortgages there one of the most regulated mortgage loans in the entire country. Yet not a single enforcement action based on complaints has been filed against reverse mortgages in the last six years, according to the Texas Department of Savings and Mortgage Lending.
Since 2010, $1.07 billion in reverse mortgage funds have been accessed by Texas homeowners.
The 1.3 million homes owned by seniors age 65 or older represent 22.9% of all households in the state. Additionally, Texas is home to 5.2 million baby boomers that will all be at least age 65 or older by the end of 2030, putting the Lone Star State on pace to become the largest reverse mortgage lending state in the country.
“The strong growth we’re seeing in Texas reinforces our belief that reverse mortgages remain a safe, cost effective and critical retirement option for senior homeowners as they evaluate their financial plans,” added Norman.
Written by Jason Oliva