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A Paradigm Shift in Home Equity


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Those nearing retirement are viewing home equity in a new light

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A Paradigm Shift in Home Equity has begun. The iconic American dream and home ownership have become so intertwined it is difficult to separate the two. What is key is the dramatic shift in how American retirees view home equity and mortgages. Until the last 5 years most reverse mortgage borrowers were children of the Great Depression.


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  1. now, if only boomers lived in single level modest homes suitable for retirement instead of 3 story McMansions which have little or no appeal to the next round of buyers. It would also be better if they didn’t have such large mortgage balances.

  2. I think that the program will continue to be viewed as a “last resort” by some but I like to think that more potential retirees will take a more proactive view of the program and use it wisely.

  3. In a word no. Financial Planning thought leaders remain ahead of the curve when it comes to recommending a rather obvious solution to the retiree’s or near retiree’s dilemma: They have failed to save enough to sustain their current lifestyle for the remainder
    of their expected life. The average retiree is unaware of solutions being suggested by research articles by people such as Harold Evensky/John Salter, Barry & Stephen Sacks, and the “Mortgage Professor” Jack Gutentag. It takes time for leading edge ideas to “drip down” to the mainstream media.

  4. I believe that as we continue to educate, whether it be one on one potential borrower or a group of realtors, builders and/or financial advisors, then we will continue to see an increase in the use of home equity, going forward. I only wish we were not going to have any of the products currently offered have significant change brought forth or completely eliminated.

    Going forward…we have the wind in our sails and we must cover as much territory as possible.

    Much Success to all!

  5. Do not cut short what we just experienced last year. The results we want today will take years to achieve. Yet without this milestone, years would be several decades if not longer. Yet our active use of recent articles in marketing to the CFP community can speed the process considerably.

    Unlike the 2008 milestone when the first Baby Boomers turned 62 and the years of promised endorsement increases was lost in the worst housing depression in American history, this milestone has the promise of higher endorsements if the industry will market to this specific referral source. Waiting to market to this segment will neutralize an otherwise significant achievement.

    To change the minds of experience practitioners is not an easy task. While we might look at all of the articles as helpful, within the financial planning community they are looked at much more differently.

    We should not look at these articles equally. CFPs certainly do not. Many in our industry like the article by the Sacks brothers but one has to sell the Sacks brothers as a reliable source before the article has significant value to a CFP. Yet the articles by Dr. Salter particularly the one co-authored with Mr. Evensky has far greater value. Mr. Evensky is known to many CFPs as the “Dean of financial planning.” While Dr. Guttentag is well known in our industry, his views are not as readily accepted on financial planning issues as those of Mr. Evensky or even Dr. Salter.

    While I agree with Mr. Tomko, that this will have more of a drip down effect than a waterfall, the speed and size of the drops will be dramactically influenced by how actively we market to the CFP community using the articles written by those referred to as “Financial Planning thought leaders.”

    This comment does not necessarily represent the view of Security One Lending or its affiliates.

  6. I spent this weekend with a realtor group, all of whom listened intently to discusions concerning the HECM purchase and how it could benifit senior buyers. Most were oblivious as to its useage, but became more than casual listeners when misinformation was replaced with facts and the obvious opporunity for additional business became apparent.

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