2021 Reverse Mortgage Optimism
The forces behind industry optimism, diversification, and economic uncertainty. Watch Now (3-min video).
Despite political and social unrest and economic uncertainty reverse mortgage lenders are expressing optimism in both the program’s viability and growth. Additionally, some have announced to further diversify and grow their forward or traditional mortgage originations. In the next three minutes, we will examine the forces behind industry optimism, the possible motivations for increasing traditional lending, and the uncertainty that surrounds the U.S. economy this year.
One of our commenters on HECMWorld said this of industry optimism. “While 2021 may be the calendar year that ends the COVID-19 pandemic, this fiscal year is starting out to be a year of mixed messages, optimism in the face of humbling fact, and troubling issues facing our industry. No matter what one’s experience or knowledge maybe, in these times we need to be flexible and “improvise” whenever necessary.” (-The Positive Realist). A fitting comment considering the pseudonym used.
Our industry’s lenders have manifested their optimism in stepping up and effectuating significant changes in technology, sales processes, and modifying their sales and loan offerings to reach a larger pool of eligible borrowers- including those under the age of 60 or 62. Despite national stay-at-home directives and strict regional lock-downs HECM loan applications climbed significantly last year, up month-over-month throughout the summer and fall. A testament to both growing financial uncertainty among senior homeowners and rapid adaptation to remote sales.
WORRY LESS, LIVE MORE
How could eliminating your mortgage payment change your life?
No Mortgage Payments
Tax-Free Money
Bills Paid
Cash on Hand
Contact Cynthia today by clicking below to find out if you qualify for a Reverse Mortgage.
Today more reverse mortgage dominant lenders have embraced traditional or forward mortgage lending. Some of that can be attributed to their parent company’s established forward mortgage operations. Reflecting on the existing division of forward and reverse lending Liberty Reverse Mortgage president Mike Kent told Reverse Mortgage Daily, “We know what the opportunity is in the forward space, and one of our continued efforts in 2021 will be [finding ways to] tap into that,” Kent says. “You know, we have customers that are doing a 30-year fixed-rate [forward] loan, and they’re over 60 years old. And believe me, we have customers who do it that have LTVs that would qualify for a reverse mortgage.”
Launching a traditional lending division or expanding its footprint is not necessarily a new phenomenon. In early 2018 American Advisors Group announced the opening of a new traditional mortgage office with 70-80 loan officers in Sacramento, California.
Fairway Independent Mortgage, the sponsor of this show has a long-established and successful traditional lending operation, one that brings particular opportunities to place reverse mortgages on a more even playing field. “[I want to ensure that] reverses are given a fair audience and that they’re properly sold, and properly explained. That they’re used when they should be used, because there are a few too many forward mortgages that are done because people are just used to doing them”, says Harlan Accola- reverse mortgage director at Fairway Independent Mortgage. Accola added, “if somebody is a veteran, we certainly want to talk to them about a VA loan. If somebody is a first-time homebuyer, we want to talk to them about a first-time homebuyer program. So if somebody is over 62, why don’t we want to talk to them about a reverse mortgage option? Even if they don’t go with it, they should know about it.”
Our present and future economic uncertainty are undeniable as millions of additional jobless claims are filed, many of which will be from older workers who find themselves facing the reality of ‘involuntary retirement’. In its newsletter, Deloitte writes, “Vaccine development is undeniably good news for consumers and businesses. But the damage to the economy, from shutdowns and withheld aid, has already been done. The coming months will show the extent—and suggest the direction of the recovery.”
Assessing the economic damage may take time, and it’s expected U.S. economy will face a double-dip recession. The Federal Reserve’s printing presses are working overtime which has dramatically cut interest rates. This is likely to prop up today’s inflated real estate market, that is until the Fed decides to unwind their balance sheets and contracts the money supply.
Source: https://hecmworld.com/reverse-mortgage-news/hecm-optimism-diversification-economic-uncertainty/