Pointing to a survey conducted by Marttila Strategies the public-opinion research firm contracted by NRMLA, The Macomb Daily, reported on the stark difference between some negative reporting on reverse mortgages and a high level of borrower satisfaction with the product. The story highlights how many articles reporting on reverse mortgages rely on misconceptions, past practices or perceived potential harm, rather than actual results in their portrayals of the product.
In the article, Lew Sichelman finds that many reports on reverse mortgages focus on the cost as a prohibitive feature of the program. However, he notes that other than the necessary FHA insurance premium, the costs are in no way out-of-line with traditional mortgage, and this is without mention of the HECM Saver, which drastically reduces this upfront cost. Additionally, he points out that other negative claims are previous issues that have been addressed by regulation or practice, such as shared appreciation of cross-selling of annuities.
Another misconception that critics often point to is the impact on heirs and the ability for borrowers to pass on their homes as a result of the reverse mortgage. The survey, on the other hand, found that almost 90 percent of adult children fell that living parents should focus on taking care of themselves, rather than on leaving an inheritance.
The survey found, as reported by Sichelman, that 43 percent of respondents gave their reverse mortgage a 10, on a 10 point scale, and a total of 75 percent perceived the product positively. Additionally, nearly 80 percent stated they would reccomend the product to a family member or friend.
John Marttila of Marttila Strategies added that the survey provided an uncommon level of confidence for a product or topic. "Rarely does a research program provide such decisive results as this one has," he said. "These attitudes belie the negative accounts that have been widely reported in the media."
Such research into the reverse mortgage product provides inconvenient data to those who seek fault in the program. More surveys of this type will need to be conducted and reported on to help change the tone of reporting that too often relies on previous accounts to construct or document their claims.
It is through such qualitative data that the potential for reverse mortgages to serve an important role in evaluating the retirement funding options for older Americans. The challenge faced by the industry and NRMLA will be to drive this message into a greater public awareness. A product that obtains such a high level of consumer confidence deserves to be a key component of the retirement planning discussion.