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Survey reveals a missed opportunity for HECM acceptance

Mutual of Omaha Mortgage reverse mortgage retirement survey
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There’s a scripture that says in part, “My people perish for a lack of knowledge”. This phrase has been applied in countless ways and it can be said it applies to retirees who lack a basic understanding of how a reverse mortgage actually works or who’ve been misguided by myths and misconceptions.

Mutual of Omaha Mortgage Survey Results

A recent Mutual of Omaha survey reveals a severe knowledge gap about the basic features of a reverse mortgage among older Americans and retirees. Nearly three-quarters (74%) of respondents in a Mutual of Omaha survey report that they have little or no knowledge about reverse mortgages, with others revealing misconceptions about how exactly they work

“Access to cash is a critical part of a retirement plan, especially when retirees are faced with inflation, unexpected expenses, and longer lifespans,” said Shelley Giordano, director of Enterprise Integration for Mutual of Omaha Mortgage.

Mutual of Omaha surveyed 400 U.S. consumers over the age of 60 between the dates of April 13-25th. Those surveyed were asked to describe their current financial needs and then rate their knowledge of reverse mortgages. They were also asked what getting a reverse mortgage may mean to them and what needs it would meet.

Here are some of the more notable takeaways from Mutual’s survey.

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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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4 Comments

  1. Hi Shannon:
    It is my understanding that the heirs could buy the home for 95% of the value upon death of the borrower. Is that correct or would they have to pay the entire loan balance upon death of the borrower? Thanks for clarification.

    • Sandy- good question. The 95% payoff only applies if the HECM’s ending loan balance exceeds the current appraised value of the home. For example, if the homeowners had a $400,000 outstanding balance and the home was appraised at $850,000 then the estate or heirs would stand to claim $450,000 after paying off the full outstanding HECM balance of $400,000.

    • Sandy,

      Technically the heirs inheriting the home are not buying it even. when the lower of the current UPB or 95% of the current appraised value of the home payoff rule applies. This payoff rule is under the nonrecourse section of the mortgage contract and is only available to heirs. This payoff rule is NOT available to borrowers.

  2. Such a good topic. As a Reverse Mortgage Professional for over a decade I am still answering these basic questions very often. Both to the potential borrower or the family. I continue to stress to clients that they still own and have full control over the property. There is a great need for education in the reverse mortgage space. Thanks for continuing to cover these topics Shannon.
    Larry M.


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