“My aunt just did this with her home in Brooklyn under the guidance of a financial planner. This is the best way to go about this, and it works that way,” Dave Hershman, director of branch support for McLean Mortgage Corp. said in the latest issue of MPA. “Most people run into a situation where they have high amounts of equity in their homes, but aren’t able to necessarily meet their monthly income needs, so in the event you want to keep your home, this is an option for seniors at this stage of their retirement planning.”
Originators may scoff at the idea of potentially splitting a commission with financial planners, but given the bad press the products have received of it, it may be what’s needed to revive the image.
mortgages have come under fire recently, with the CFPB stating
commercials for the products are misleading Americans.
And they are gaining a bad reputation among Americans.
Despite recent FHA
regulation changes, a recent survey of over 40,000 mortgage professionals
found that 72 percent say the stigma surrounding the products are the biggest hindrance when offering them to clients.
Still, reverse mortgages
can be a good option for the right client, say industry players.
“A little-known feature of the FHA HECM program is being recognized by financial planners as a way for people 62 (or older) to have an additional revenue stream in retirement,” Dan Harder, vice president of 1st
Reverse Mortgage USA told MPA. “The FHA HECM program allows the senior homeowner the ability to use the equity in their home to supplement monthly cash flow and defer Social Security benefits.”
Which is good news, considering Americans born between 1943 and 1954 will receive 75 percent of the benefits at 62 than they would if they deferred to 66.
They just might be the most controversial mortgage product, but originators believe with proper guidance the right client can take advantage.