As predicted, it's another recording breaking year for reverse mortgage volume. Over 90,000 FHA insured reverse mortgages were done in FY 2007 which ended on Sept. 30. This breaks the previous year's number of 76,000 + for fiscal 2006. And compare that to 43,121 loans in FY 2005. These are significant numbers for a loan product that is still considered to be in its infancy, barely a blip on the radar screen to many loan officers.
If you haven't done so already, it's time to sit up and take notice of this innovative loan that can change the lives of your clients, and change your business in the process. Let's take a look at some recent data, and see if you will decide to get "ready in reverse".
The first of the 77 million baby boomers in our country (those born between 1946 and 1964,) turned 60 in 2006. As with just about everything they have touched, they're going to have a dramatic impact on our economy as they age and move toward retirement. This is the largest generation in our country's history and they will define retirement on their terms. Travel, purchasing vacation properties, and helping children and grandchildren are goals sited for their future. However, it is no secret that many are not financially prepared for the lifestyle they want in their retirement years, and may continue working well past their intended retirement age.
Are you missing the opportunity to serve this demographic group as part of your overall strategy? The reverse mortgage can unlock built up equity that would otherwise be doing little or nothing for the senior homeowner. Utilizing your expertise, you become the solution when you show them how to effectively use this equity. When you combine the easy qualification guidelines, the fact that the loan proceeds are tax free, and the desire of seniors to remain at home, the possibilities are endless. As this product becomes more mainstream, the demand will increase for many years to come. New products as well as improvements to existing ones are on the horizon.
We all know the importance of maintaining those Realtor relationships in this uncertain market, and one thing is certain- your Realtor partners are hungry for the information. When you show them how a senior client can access tax-free funds from this mortgage and use those funds toward a vacation property or second home, you have just cemented that relationship. Help them build their business in a way they have probably not heard about before. You will be viewed as the expert, an innovator, and someone who really is a partner. Try speaking about reverse mortgages at your local board of Realtors (I teach a class for continuing ed once per quarter). Watch the reaction you'll get. That is just one way to market this product- there are many, many more.
No doubt the next several years will also be record setting years for these types of mortgages. As the population ages and the need to use equity as a financial tool in the retirement years becomes evident, it will become the natural product of choice. Many savvy financial experts are already including discussions about reverse mortgages in their overall planning strategy. There is even a product that targets the affluent senior. Imagine showing your client who has a home valued at $2 or $3 million how they can access tax free funds and never make a mortgage payment! No longer is this a product only for the destitute.
Loan originators who will be truly successful over the long term in this niche will be "ready for reverse". You'll need a game plan that is different from most things you have done in the past with your "forward" loans. Seniors will be among the most loyal customers you have ever seen. In addition, it is often their children who first investigate them for the seniors, and here is your chance to shine and win over that business as well. Frequently, after closing, I'll get a call a month or so later asking me if I can handle a refi or "move up" purchase for another member of the family. You can increase your sphere many times over just by doing one reverse mortgage.
There has never been a better time to embrace this niche product that targets the fastest growing age group in our country. Don't let another year go by...waiting could be costly.
Sue Haviland is a Certified Senior Advisor and founder of Reverse Mortgage Success where hundreds of loan officers around the country are learning the insider secrets to success in the fastest growing niche the mortgage industry has ever seen. She is an in-the- trenches loan officer who still originates every day.
Sign up for a free mini-course about reverse mortgages at http://www.reversemortgagesuccess.com and see what all the buzz is about.
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