The Yin & Yang of the Covid-19 Pandemic - Skip to content

The Yin & Yang of the Covid-19 Pandemic


Three years ago our world was turned upside down by the novel coronavirus, now known as Covid-19. The virus’ disruptive force on all facets of the economy and lending was unprecedented and unexpected. Consequently, reverse mortgage professionals had to completely transform how business was done.  Looking back, here are some of the benefits and fallout of the virus that swept the globe.

The silver linings from the Covid-19 pandemic

  • Remote work was nearly universally embraced by office workers and their employers.
  • Older homeowners were more receptive to using remote meeting technology like Zoom than we had ever anticipated!
  • Originators began to buckle down on both learning and leveraging the technology available to them. Many Reverse Focus customers began using our Sales Engine CRM’s workflow email automation with exceptional results.
  • FHA pivoted quickly to embrace new technologies and policies during the pandemic, including exterior-only appraisals and improvements in processing Covid-19 hardship claims.
  • Reverse mortgage professionals either established or improved their online presence. The rush of interest in turn-key websites for reverse mortgage professionals and SEO marketing to specific regions surged throughout 2020 and 2021.
  • Lenders made rapid improvements to their in-house technology increasing efficiencies in sales, processing, underwriting, and outbound marketing.
  • Home values skyrocketed thanks in part to the Federal Reserve’s monetary policies and the government’s economic stimulus measures. The Fed funds rate remained at nearly zero percent for almost two years!
  • HECM-to-HECM refinances supercharged loan volumes for nearly all HECM lenders.
  • Year-over-year HECM endorsements surged by 34%, 18%, and 31% in the fiscal years 2020, 2021, and 2022

The negative consequences of the Covid-19 pandemic

  • Secondary market investors began to cut loan pricing in part because of the erosion of HECM loan prepay speeds which impacted the performance of HECM Mortgage Backed Securities (HMBS).
  • The opportunity to prospect and nurture new first-time HECM borrowers was severely degraded by the over-dependence on HECM refinance transactions.
  • Home values have begun to fall in several major U.S. real estate markets in response to the Fed’s numerous interest rate hikes and the subsequent destruction of homebuyer demand.
  • Higher interest rates and softening home values have left many homeowners unable to get a reverse mortgage without bringing in substantial funds at closing.
  • Late last year and also in early 2023 HECM lenders large and small cut staffing levels and laid off hundreds of reverse mortgage professionals as the housing and lending market began to soften.

Sometimes we may ask ‘How did we end up here’? The answer is often found in retracing our steps. 


-Shannon Hicks


Leave a Comment

No comment yet, add your voice below!

Add a Comment

Your email address will not be published. Required fields are marked *


Recent Stories


Subscribe to join our World

Get the latest reverse mortgage news delivered straight to your inbox.