Why is the HECM a niche product?

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The Brookings Institution: Reasons for low HECM uptake and how to expand market growth

Despite the more Americans retiring without sufficient savings to fund their non-working years, reverse mortgages remain a niche product- one whose acceptance has shrunk considerably in recent years. This conundrum is addressed in a recent paper released by the Brookings Institution entitled, “The unfulfilled promise of reverse mortgages: Can a better market improve retirement security?”

It’s ironic when you consider the increasing debt held by older Americans, the near-complete disappearance of pensions from private sector companies, and increasing longevity. One would conclude this should be the golden age for reverse mortgages- but it’s not. The authors of the paper from the Economic Studies at the Brookings Institution made their case on why the Home Equity Conversion Mortgage is not widely accepted and how the HECM can move from being merely a niche product to one that has widespread acceptance. For those of you not inclined to read the report here’s our brief summary.

Researchers present HECM fixes last week

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How do you fix the reverse mortgage and expand its availability? Researchers presented their ideas last week

There’s no shortage of ideas when it comes to just how to strengthen the federally-insured reverse mortgage and expand its reach to older homeowners. Last Monday, the Brookings Institution hosted a symposium entitled “Reverse mortgages: Promise, problems, and proposals for a better market”. Participants included AARP’s Debra Whitman, Stephanie Moulton of Ohio State University, University of British Columbia professor Thomas Davidoff, Longbridge CEO Chris Mayer, and Laurie Goodman from the Urban Institute. The event is part of the Brookings Institution & the Kellogg School’s meetings on retirement security. These are not pending proposals for the Home Equity Conversion mortgage, nor are they being debated by lawmakers. However, these policy think tanks play an important role in our federal government and help shape public policy.