Generation Mortgage Company unveiled its plan to reposition reverse mortgages as a flexible financial retirement tool and demonstrate the product's feasibility through a new App Planning Tool called nu62. Generation Mortgage's nu62 program shows brokers and consumers how to use a reverse mortgage as a flexible financial resource, enabling borrowers to age in place comfortably. The nu62 App graphically plots the correlation of home equity amount to personal consumption to home equity credit line growth over any period of time in a person's life after age 62. It also compares a reverse mortgage's performance to a traditional mortgage and clearly demonstrates a reverse mortgage's advantage.
"Reverse mortgages were always positioned to give all eligible homeowners aged 62 and over an opportunity to tap into the available equity in their home as a financial resource," said Colin Cushman, president and CEO of Generation Mortgage. "With the arrival of the closed-end Home Equity Conversion Mortgage (HECM) in 2009, came the trend for a one-time full draw. It was clearly suited for people that had more immediate cash needs."
Cushman was named CEO of Generation Mortgage last month after managing the credit risk of the reverse mortgage program at the Federal Housing Administration (FHA) where he served as the Director of Portfolio Analysis. In that role, he was responsible for developing valuation models to support product development, premium pricing, risk management and operations. He led the design and creation of the new FHA Home Equity Conversion Mortgage (HECM) Standard and Saver products, helped shape all policy guidance on the HECM program, and co-authored the paper titled, "Identification of Home Maintenance Risk in Reverse Mortgages."
Reverse mortgages are a federally guaranteed financial instrument that allows eligible homeowners 62-and-over to access equity in their homes, receiving funds either as a series of monthly payments, a lump sum, a credit line or a combination of those options.
Polls show that 80 percent of older Americans want to remain in their homes as long as possible and roughly 50 percent are considering using home equity to help fund retirement. There are now about 24 million households aged 62 or older in the nation and 12 million hold more than 50 percent of their net worth in home equity.
