Mortgage

Are more borrowers really taking out non-agency reverse mortgages? Originators weigh in

Lenders say interest has spiked, but data is lacking. LOs in the field chime in

In the past year, the reverse mortgage industry has seen a number of non-agency reverse mortgages come to market.

While they are not insured by the Federal Housing Administration like their HECM counterpart, they can cater to homes that exceed FHA’s claim amount – offering up to $4 million of home equity in cold hard cash – and they come free of the costly mortgage insurance that can be a deterrent for the HECM.

Now, five lenders offer proprietary reverse mortgages with varying features not available on a HECM, like a second-lien and a line of credit, and word has it one more is about to come to market.

But while most lenders say interest in their jumbo reverse products has been strong – with some saying it has even surpassed expectations – data is sorely lacking on just how many of these non-agency reverse mortgages the industry is actually closing.

To shed some light on what’s really happening, we reached out to a handful of active reverse originators to learn about what they’re seeing in the field.

Are more borrowers approaching them about proprietary reverses? Are they encountering a sizable number of borrowers who would even qualify? Do they see these products as the saving grace for a struggling industry?

Here’s what they had to say:

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