The collapse of Reverse Mortgage Funding (RMF) and its ongoing implications are deemed as the biggest reverse mortgage news stories of 2023.
Ginnie Mae seized RMF’s Home Equity Conversion Mortgage (HECM)-backed Securities (HMBS) portfolio at the end of 2022, which has had continued impacts on the company.
Industry exits were a challenge throughout the year, with both Cardinal Financial and Open Mortgage exiting the reverse mortgage business.
The government has given attention to the reverse mortgage industry, with the Federal Housing Administration (FHA) making updates to the HECM program and providing guidance.
Fewer homes will have to take a price cut before they’re sold this spring.
The Global Reverse Mortgage Market is Expected to Witness a Significant CAGR of 18.72% during 2021-2028.
Selling Reverse Mortgages to Boomers Becoming More Mainstream
The average homeowner of retirement age has 65% of their net worth tied up in home equity – and just $100,000 in financial assets.
The major shift exhibiting in the reverse mortgage landscape is increased interest and utilization of the government insured Home Equity Conversion Mortgage (HECM) program, Ginnie Mae provided broader license to allow for securitizing other less preferable types of reverse mortgage products.
Larry Waters of Reverse Mortgage Alabama pledges to comply with AARP recommendations to give consumers a better understanding of reverse mortgages.
“We have embraced their ideas and we are actually implementing them in our business. For example, instead of the old line ‘You can never lose your home,’ we now say, ‘Borrowers can continue to live in their home as long as they meet the obligations of the loan.’ There is nothing wrong with seniors understanding the real obligation.”
