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Product Changes and Returning to Founding Principles

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If you look at the federally insured reverse mortgage one could say we have come full circle coming closer to the program’s original intent. What intent? To help seniors age in place. For the most part that is exactly what the HECM or Home Equity Conversion Mortgage has done since it began in 1989. However one could argue some trends in our recent past did not reinforce that mission. Much of the program’s recent changes since 2008 would have gone unnoticed had it not been for the housing and economic crash. After all why fix what’s not broke? However the HECM program began showing signs of stress beginning with…

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Editor in Chief: HECMWorld.com
 
As a prominent commentator and Editor in Chief at HECMWorld.com, Shannon Hicks has played a pivotal role in reshaping the conversation around reverse mortgages. His unique perspectives and deep understanding of the industry have not only educated countless readers but has also contributed to introducing practical strategies utilizing housing wealth with a reverse mortgage.
 
Shannon’s journey into the world of reverse mortgages began in 2002 as an originator and his prior work in the financial services industry. Shannon has been covering reverse mortgage news stories since 2008 when he launched the podcast HECMWorld Weekly. Later, in 2010 he began producing the weekly video series The Industry Leader Update and Friday’s Food for Thought.
 
Readers wishing to submit stories or interview requests can reach our team at: info@hecmworld.com.

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3 Comments

  1. Shannon,
    Can you send me a written copy of today’s program “Back to Basics”

    Thanks

    • Skip,

      I will upload the PDF today for you. Thanks again for being a faithful viewer.

  2. The law [12 USC 1715z-20(a) in part] states the following is the reason for creating the HECM program: “The purpose of this section is to authorize the Secretary to carry out a program of mortgage insurance designed—
    (1) to meet the special needs of elderly homeowners by reducing the effect of the economic hardship caused by the increasing costs of meeting health, housing, and subsistence needs at a time of reduced income, through the insurance of home equity conversion mortgages….”

    Where is it documented in any authoritative document comparable to the law that the purpose of the HECM is aging in place. After doing a search, it is clear that the HUD HECM Handbook 4235.1 never uses the term “aging in place.” This is an idea outside of the actual reasons given as the purpose of the program.

    Aging in place is a possible outcome of a HECM but not a program requirement or even one of reasons why the HECM program was created. Because the concept has so much dogma surrounding it, the concept seems foreign when it comes to program restriction. Borrowers are free to leave anywhere just as long as one borrower resides in the home as his/her principal residence.

    While I do not have the statistics, I remember hearing that tenure payments were rarely elected by borrowers even before 2007 when ARMs were so dominant. It would be interesting to see those stats.

    As to fixed or adjustable, the real issue is whether the mortgage is open or closed.


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