The borrowers are coming. Reverse, are you ready?

by Heather Turner21 Nov 2016
The mortgage regulatory environment has been tricky one for lending since 2008, but for companies such as ReverseVision, recent regulatory changes have had positive effects on the business they perform. According to Wendy Peel, VP of sales and marketing for the reverse mortgage software and technology provider, recent regulatory modifications, such as TRID, has propelled their product into the mainstream.
Offering a full-suite of products that provide a “vision” into different areas related to a reverse mortgage, such as showing the full sequence of risk associated with the mortgage, how a line of credit grows over time and if you can purchase a home – something many borrowers don’t often realize is an option.
“[Reverse mortgages] is no longer the loan of last resort. It is a financial tool for people who have a savings or a portfolio and now this is just another part to add to their portfolio of assets,” says Peel. “We have a full series of sales tools designed to target borrowers in a different light. There are sales tools now that are very easy for LOs to use when they are talking to borrowers.”
Circling back to the effect regulation has on the industry, Peel notes how professionals and borrowers often take time to adjust to the changes, which allows them to view products, such as the ones offered by ReverseVision, in a broader sense. In other words, in the past many have viewed a reverse mortgage as using their home as a personal ATM machine and now, that perception is changing – reverse mortgage can be a true retirement strategy.
Peel mentions how even multi-million dollar net worth borrowers are now turning to reverse mortgages to pay for large expenses. “This is the exciting part of where the industry is going right now,” she says. “Savvy borrowers are getting it. It may not be for everyone in every situation, but if it fits the situation it can be right.”
As the demographic landscape of the country makes a gradual shift to be more millennial heavy, Peel points to the fact that the baby boomer generation have still not reached their peak yet. The wave of baby boomers that hit the age of 62 in the next few years will bring on a surge of activity for reverse mortgages. “With these new guidelines that have made the product safer for lenders and borrowers, it has changed the way people are looking at the product just with our software,” says Peel. “We are noticing the average age of a borrower has drop. It used to be 78 three years ago and now it is at 74 and that is a significant drop.”
Regulatory changes have helped stabilize the market and have made it very different for the borrower today, compared to a decade ago. As the wave of baby boomers hit the market, activity will pick up and the effect will be positive for the industry as a whole says Peel. “The demographics and home equity are out there; it is easy to get in the business. If you don’t know anything about the industry, let us tell you why now is the time to get into reverse.”

Related Stories:
“US senior home equity now totals $5.9 trillion”
“How to fix the bad rap reverse mortgages have”

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