A Dispassionate Examination of the HECM
We’ve all heard the predictions. The industry will bounce back to 100,000 endorsements per year, the baby boomer wave will spur industry growth, etc. A recent article on CNBC’s website predicts that retiring baby boomers will spark reversemortgage demand. Truth be told, reverse mortgage demand may increase but our industry’s volume will most likely not keep pace with the increasing need of future retirees.
A dispassionate analysis of the reverse mortgage program reveals some striking similarities to the traditional mortgage market. Generous lending guidelines combined with growing consumer demand create a boom to bust cycle. During the mid 2,000’s, the reverse mortgage program gained historic momentum as the product was pushed into the public consciousness. The HECM bubble was fueled by…
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