I have been involved in the FHA’s HECM program since 1989 and have watched it grow from a pilot with just 2,500 loans. From the beginning, there was little technology,
Over the past 25 years, the program has faced what at times seemed to be insurmountable challenges, from variable lending limits by county to lower principal limits with ongoing program changes. Regardless of what challenges it has faced, the industry has always persevered and it will continue to do so. The reverse mortgage industry relies on three primary legs of the well-known three-legged stool: qualified and eligible borrowers, qualified and participating lenders, and qualified and willing investors. This continues to exist today.
With recent program changes and the upcoming Financial Assessment, the industry is preparing for the next stage of home equity lending for reverse borrowers. Borrower and counselor education continue to be the primary drivers of an expanding group of eligible and qualified borrowers for the new HECM program. Today, the industry is enjoying increased technology with loan origination, underwriting, secondary marketing and loan servicing enhancements.
Down the road, the reverse mortgage industry will need more lenders as the HECM program becomes a nationally recognized home equity mortgage loan resource for eligible borrowers. This will be possible due to increased education and awareness of the program basics, borrower protections and the use of the HECM program as a retirement resource.
Of course, the more things change, the more they stay the same. The program has been altered, but at the end of day, the basic rules still apply. Lenders and counselors will, as always, need to connect with qualified borrowers interested in exploring the benefits of the program and teach them how a HECM can help them achieve their goals.