I have just added the 5 best recent articles regarding reverse mortgages to my links page. I found each and every one of them to add another voice to the growing notion that ignoring senior home equity during retirement is simply not in your clients' best interest in MANY cases. I'll look forward to any follow up thoughts you may have, until the next time, take care!
The South Florida FPA hosted a great 2 day conference in Ft. Lauderdale last week, complete with CE credited courses and informational sessions. I had a great time catching up with some colleagues and meeting many new friends. This video clip contains some brief comments I made to the breakfast attendees on Friday about the importance of examining senior home equity as part of a plan for their senior clients. As usual, this group of CFPs had a few detractors, but MANY more supporters, most citing the state of the economy and their clients once adequate portfolios as the reasons they are using reverse mortgages.
Other than the standard "it can be expensive" comment, the TODAY show finally gives the reverse mortgage it's proper due, as PART of the overall plan, not as the 'last resort"! And while they swing and miss again on the topic of fees ($2k - $10K???), they do give the product a fair shake as an option that is gaining acceptance ion the financial planning world. Take a look at the video clip and let me know what you think by leaving a comment below.
Please note that NBC uses flash, the video is not viewable on ipad or iphone, please view in Explorer
Take a look at a happily married couple who have simply run out of the funds that have lasted until now. Their adult children have been footing a large monthly bill in order for them to age in their home with full time in home care. When the best laid plans run their course, a reverse mortgage can be the logical solution. Many of the older clients I have dealt with over the past 7 years simply never thought about living beyond what the government actuarial numbers told them, usually somewhere in their 80's. If you ask a 90 year old the following question: "when you were 65, did you ever expect to live to 90?", I'd venture to guess that they will tell you "no way!" So, the next question to explore is this - how many financial planners are using "old" numbers to calculate how long the plan should last? And then, should they look at home Equity? Or, should they include the reverse mortgage as part of the plan? My next post will attempt to answer the question for good!
The trend is clear. As many lenders and mortgage brokers have decided to go after "other business", the dedicated reverse mortgage advisor sticks to his or her guns and continues to get through what has been the toughest of times. Just 2 years ago, 1,000 entities originated these loans, now we are just under 300. So what is it that makes this business so tough? It's not your average loan, in terms of the cycle of the loan from start to finish. Most loan originators like consistency in their business models, and reverse is simply one of the hardest niches to achieve consistency. I personally know dozens who have exited, citing regulation, licensing requirements (details about that coming in a future post), and just plain burn out, working harder and earning less. I am proud to still be in the game, and believe that those of us who can muster staying power will be the few left over to serve our aging population with these timely loans.
One of my partners once told me "you are like needle nose players. I use insurance and long term care every day, like a hammer or a screwdriver. But sometimes, a reverse mortgage is the perfect tool for the job. Imagine trying to use a hammer to do a needle nose's job!"
For years, I've watched and read pundits across a variety of media comment on the HECM products. Usually, they are uneducated writers, hitting some of the big bullet points on occasion. Time after time, I have waited to see retractions, corrections, etc. to no avail.
Something seems to be happening. I am noticing mainstream media (FOX, TODAY SHOW, MONEY, etc.) report that the reverse mortgage of today is indeed different and more importantly, they are finally agreeing that this product fits a retirement plan in todays ever changing world.
The TODAY show discussion is of particular interest, take a look below, the first couple of minutes of the clip are related. Here is a quote from the conversation, of which I wholeheartedly agree: