Will reverse mortgages become the new norm?

by Donald Horne03 Dec 2015
Wade D. Pfau, a principal at McLean Asset Management, feels that reverse mortgages don’t deserve the bad press they’ve received, predicting that they will become more prevalent in the years to come.

“As the government continues to strengthen the rules and regulations for reverse mortgages, and as new research continues to pave the way with an agnostic approach about their role,” writes Pfau in a blog for the Wall Street Journal, “we may be at a tipping point in which reverse mortgages become much more predominant in the years ahead.”

It was back in the summer that Illinois moved ahead with new legislation requiring a three-day “cooling-off period” from the time a lender makes a written commitment to make a reverse mortgage, in an effort to ensure that seniors completely understand what they are signing – citing complaints and confusion over how reverse mortgages work.

Legislation that may not be needed, as Pfau sees the association of reverse mortgages with predatory lending practices and scams as unwarranted.

“A lot has changed in the past several years, and the result is that reverse mortgages have an undeserved bad reputation” states Pfau.

In fact, many companies specialising in reverse mortgages are ramping up their services and staff to meet consumer demand, like Reverse Mortgage Funding (RMF), which added a regional account manager – Michael J. Wyrostek – for its Midwest region in support of its third-party origination (TPO) sales channel – and to help educate consumers on the value of the product.

“We believe his knowledge of the industry and passion for the product,” RMF’s National Sales Leader Mark O’Neil told MPA, “coupled with his experience in educating consumers and business professionals about reverse mortgages, will help advance the brand throughout the Midwest.”


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