We have all read and heard about the results of the the credit crisis, which all begain with high-risk home loans. The entire forward mortgage industry is in a world of hurt.
I know mortgage loan officers all over the country. Each one tells a similar story. All their businesses have nose dived, and some have lost as much as three quarters of their business.
One common denominator of those crying the blues is that they are all in the forward mortgage segment of mortgage lending. On the contrary, reverse mortgages are booming.
The reasons are really two and a half fold. The first and most important is reverse mortgages by their very nature do not obligate the borrower to make payments. It's why people get reverse mortgages in the first place.
If their is a risk to the reverse mortgage side it is in the possibility that one day more would be owed on the home than the home is actually worth. This is why lenders create reasonably large cushions between the value of the home and the actual loan.
Adding to the recipe, the over 62 market is growing like a weed. Many demographers believe the over 62 population will double by the year 2030.
Furthermore, with the ever increasing cost of living and this group's propensity to save less than its parents, the need for additional income will persist.
Another less important factor is the current economy. Many seniors have lost much of their savings in the stock market dive of '08, and large numbers are looking for additional financial tools.
You can imagine how this group feels. The proverbial rug has been pulled out from under them, and they are groping for some financial tool to create some feeling of safety.
It's hard to say exactly where this goes in the next few months to the next several years. Home values continue to fall nationally and no one knows where they will bottom out.
The real nemesis to the reverse mortgage industry is home values reducing radically. Outside of this fairly unlikely occurance it seems the future looks bright.
I know mortgage loan officers all over the country. Each one tells a similar story. All their businesses have nose dived, and some have lost as much as three quarters of their business.
One common denominator of those crying the blues is that they are all in the forward mortgage segment of mortgage lending. On the contrary, reverse mortgages are booming.
The reasons are really two and a half fold. The first and most important is reverse mortgages by their very nature do not obligate the borrower to make payments. It's why people get reverse mortgages in the first place.
If their is a risk to the reverse mortgage side it is in the possibility that one day more would be owed on the home than the home is actually worth. This is why lenders create reasonably large cushions between the value of the home and the actual loan.
Adding to the recipe, the over 62 market is growing like a weed. Many demographers believe the over 62 population will double by the year 2030.
Furthermore, with the ever increasing cost of living and this group's propensity to save less than its parents, the need for additional income will persist.
Another less important factor is the current economy. Many seniors have lost much of their savings in the stock market dive of '08, and large numbers are looking for additional financial tools.
You can imagine how this group feels. The proverbial rug has been pulled out from under them, and they are groping for some financial tool to create some feeling of safety.
It's hard to say exactly where this goes in the next few months to the next several years. Home values continue to fall nationally and no one knows where they will bottom out.
The real nemesis to the reverse mortgage industry is home values reducing radically. Outside of this fairly unlikely occurance it seems the future looks bright.
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