Chart courtesy of RMInsight.com
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:
“ I actually have a problem with this notion that she owes her daughter an inheritance. You know, if your mother has a place to live for the rest of her life, that is paid for, no worries, then you're not going to have to step in and pay for a place for her to live, and that in and of itself is a gift. And this notion that our parents, who put us through college and take care of us our whole lives then owe us something at the end. I have trouble with that."
Reversing Conventional Wisdom