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Brokers can help
Although they may be in need financially, many seniors will need other reasons to consider a reverse mortgage. Mortgage brokers and loan originators eager to help can point to a recent survey conducted for the National Reverse Mortgage Lenders Association. It found almost three-quarters of senior citizens who have a reverse mortgage said they were satisfied with it.
The survey also found that close to 50 percent of seniors worry they won't have enough money to support themselves in retirement. In other words, there's little to no question about current and future consumer demand for reverse mortgages.
The same will likely soon be true of investor demand. As reverse mortgages build market share, money managers, banks, hedge funds and others will look to capitalize on the trend. Until about a year ago, Fannie Mae was the biggest buyer of reverse mortgages. Now, many are packaged into bonds guaranteed and issued by Ginnie Mae. In almost all cases, the securities carry a double guarantee, with the other part coming from the FHA. Typically, institutional investors looking for a fairly predictable cash flow purchase the bonds.
Reverse mortgages aren't immune from challenges. If economic trends are any indication, however, this lending product's importance will only increase as aging baby boomers enter the next phase of their lives. Mortgage brokers looking to tap the market would be wise to move without delay.
H. Marc Helm, president of Reverse Mortgage Solutions Inc. (RMS), has worked in the financial-services and mortgage-banking industry since 1976. Before joining RMS, Helm spent most of the past decade as senior vice president and manager of Washington Mutual's loan-servicing operations group. He is presently a member of the servicing committee of the National Reverse Mortgage Lenders Association.
Contact Helm at firstname.lastname@example.org. Visit RMS at rmsnav.com.
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