California MBA Member Profile

For the uninitiated, the HECM is a HUD-insured, Ginnie Mae securitized reverse mortgage designed for borrowers 62 years and older that can be structured to tap home equity or purchase a home.

HECM and private reverse mortgages are solid, “evergreen” loans that perform well under any economic circumstances. That’s because these programs serve a demographic of homeowners who hold $7.54 trillion dollars in home equity and demonstrate a strong demand to tap into it.

It is a common misconception that older Americans who are “equity rich” or own their homes outright are not in the market for a mortgage. On the contrary, many motivators inspire seniors to seek out mortgage solutions, such as making home modifications to age in place and downsizing/relocating to be closer to children and relatives. Also, as fewer seniors enter retirement with pension income and carry more debt, home equity must be considered in their financial planning. This is supported by STRATMOR Group research, which shows that annually, more than one million seniors take on a mortgage.

Lenders who understand the needs of their senior borrowers and provide products tailored to their stage in life will be able to sustain current customers as borrowers for life, as well as earn referral business opportunity from the families and friends of satisfied customers.

The unique relevancies of the HECM in today’s pandemic-impacted market are manifold. HECMs are increasingly recommended by financial advisors to shield from sequence risk — a phenomenon in which market volatility disproportionately depletes the financial portfolios of individuals early in retirement. Tapping income through a reverse line of credit instead of selling temporarily deflated stocks gives investment portfolios the opportunity to recover as the market bounces back, thus significantly improving seniors’ retirement income and estate value at end of life.

Moreover, at a time when many lenders are stepping away from HELOCs, the HECM can provide borrowers with a means to access their home equity, whether to shield themselves against sequence risk or access funds to manage pandemic-induced economic disruption. The HECM can offer borrowers a guaranteed monthly income independent of stock market swings and the labor market.

More lenders rely on ReverseVision to support reverse mortgage transactions than all other systems combined. It’s a tremendous achievement for our firm — and a responsibility that we take seriously. That is why we have evolved our strategy to deliver not only the best reverse mortgage lending platform, but also a platform that empowers lenders to originate reverse loans alongside their other programs directly through their preferred LOS and POS applications.

By producing open APIs that accelerate connectivity with all mortgage lending and retirement planning systems, we are powering greater integration and use of reverse lending in the mortgage ecosystem. Already we’ve spearheaded partnerships with leading digital mortgage firms such as OptifiNow and Total Expert that greatly expand presentation and demand for reverse lending. Ultimately, our commitment to evolving platform functionality stems from a desire to equip every lender—forward and reverse—with tools to easily integrate HECM and private reverse mortgages into the loan evaluation, sales and origination process for every applicable senior borrower.

It is in everyone’s best interest — both lenders and consumers — to make sure borrowers 62 years and older are aware of this home equity option.

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