During the last four years of my reverse mortgage career, I have listened to a multitude of speakers at various conferences speak about the goals of the HECM program. One often stated goal is providing our seniors the ability to “age in place.” As much as I believe this to be a noble goal, I also believe it to be more rooted in romanticism than practicality or reality.
I realize the idea of living out our lives in the “family home” where we raised our children and created hundreds or thousands of lifelong memories sounds appealing, and on the surface it is. It is understandable that we would want to be in a place that is familiar and emotionally secure to us. After all, this is our home. However, what we need to take into account is that our needs have and will continue to change. What was once practical and perfect for our needs is now likely impractical.
Over the last four years I have been directly or indirectly involved in the origination and purchase of thousands of HECM loans. During this time I have reviewed hundreds of appraisals. In most cases, the properties I reviewed were of good quality and in good repair with features that would understandably attract a young and growing family. However, many of these properties were built for the needs of the homeowner 40 to 50 years back, and those needs have changed. In addition, due to the age of the properties, they often lack conveniences provided by advances in construction technology.
Homes built 50-plus years ago can be well maintained, but they typically lack the advantages offered in homes constructed today. Advances in building materials, energy-efficient appliances and more thoughtful functional design have driven down the cost of home maintenance and increased ease of use. Additionally, homes being built in communities specifically designed for the needs of seniors offer not only advances in design, functionality and materials, but also a community environment tailored to their needs.
When my dad retired, he and my mom moved to a 55-plus community in Florida. The community was perfect for their needs and the home was far more appropriate than our big and old two-story Cape Cod home in Illinois. Their new home was extremely energy-efficient and single-level with wider hallways, a more open design and no stairs. The home was perfect for their needs, but more importantly, so was the community.
My dad passed away two years after my parents moved to Florida. But I wasn’t too concerned about Mom because she was always telling me about her great neighbors and how tight-knit the community was. It was this sense of community that would later save my mom’s life.
Thirteen years after my dad passed, Mom’s health was starting to become an issue. The final determination to move her home with us was the result of an incident that, thanks to a concerned neighbor, did not turn into a tragedy.
Mom became faint one morning and fell in her kitchen. She was unable to get up. Fortunately, her neighbor, Lucy, noticed she had not seen my mom the entire day. Concerned, she went over to my mom’s house and rang the bell. Mom was unable to answer the door, but Lucy sensed something was wrong and called for help. Mom was taken to the hospital and checked in for the night. Her doctor told her she was very lucky Lucy came by, because she may not have made it all that much longer without medical care.
Lucy sensed something was wrong because she understood how things can change rapidly as you get older. She understood this because she was experiencing the same process. Lucy was one year younger than Mom. She didn’t need to worry about getting the kids to soccer practice or dance lessons or the hundreds of other things that younger families need to deal with and pay attention to. She was engaged with her neighbors because of their shared experiences and the fact that they were at the same place in their lives.
As professionals in the reverse mortgage industry, we have a responsibility that goes beyond simply making loans. Our responsibility extends to the needs of our clients. Our responsibility requires us to give input and guidance not only on the loan programs we offer, but also on the appropriateness of the entire plan. This may require including other family members or friends in the discussion. It may extend the process as we work with our clients to think through their options.
In the end, the goal to help seniors age in place may in fact not be the best goal for us to set. Instead, a mission to help seniors age in a place—a place that is safe, a place that is energy-efficient and low-maintenance, a place that provides for an engaged community, a place appropriate for their needs—may be a better focus that will provide our senior clients with the solution they seek.
