Reverse mortgage volume nearly doubles from last yearMortgagePress.comReverse mortgage volume
Fueled by rising home values, larger sales forces and increased
consumer acceptance, the number of federally insured reverse
mortgages made in the United States in 2006 grew by 77 percent,
according to the National Reverse Mortgage Lenders Association
(NRMLA).
During the most recent federal fiscal year, ending Sept. 30, the
Federal Housing Administration (FHA) insured 76,351 Home Equity
Conversion Mortgages, compared to 43,131 last year.
"More seniors are recognizing that traditional retirements
tools, such as IRAs, pensions and 401(k)s, are not providing
sufficient income to help fund everyday living expenses and
healthcare," said Peter Bell, president of NRMLA. "Through proper
education, more retirees are recognizing that the home they have
lived in for so many years can now take care of them by using a
reverse mortgage to access the equity accumulated over 20, 30, 40
years to help them [live] more comfortably."
The Santa Ana, Calif. metropolitan area displaced Los Angeles as
the top reverse mortgage market in the country, with 5,825 loans
funded (compared to 3,067 in 2005), followed by Los Angeles (5,758,
compared to 3,915 in 2005); Sacramento, Calif. (3,625, compared to
2,161 in 2005); Coral Gables, Fla. (3,577, compared to 1,387 in
2005); San Francisco (3,353, compared to 2,040 in 2005); New York
(2,492, compared to 1,454 in 2005); Fresno, Calif. (2,461, compared
to 942 in 2005); Phoenix (2,438, compared to 720 in 2005); Boston
(2,263, compared to 1,148 in 2005); and Denver (1,947, compared to
1,515 in 2005), which rounded out the top 10.
NRMLA attributes the explosive growth to several factors,
including high home appreciation rates in many parts of the
country, which allows seniors to access greater amounts of equity;
more lenders offering the product (NRMLA now represents about 500
firms nationwide, compared to 370 at this time last year); and
greater acceptance of reverse mortgages as a wealth-management
tool.
Indeed, the government's top housing official, Brian Montgomery,
who serves as FHA commissioner and assistant secretary of housing
at the U.S. Department of Housing and Urban Development (HUD),
commented at NRMLA's annual meeting in September that he
anticipated reverse mortgages would one day be as commonplace as
401(k)s and other retirement planning tools.
"HUD has gone to great lengths to educate community leaders and
senior advocates about the potential benefits of reverse mortgages,
which has helped make more people comfortable with recommending the
product to their elderly clients," Bell noted. "I think
Commissioner Montgomery deserves as much credit as anyone for
helping to make reverse mortgages a more mainstream financial
planning tool."
For more information, visit www.nrmla.org.
