Ask the Expert: Should I add reverse mortgages to my portfolio?

It's a program that can benefit many Americans if used correctly, but is it worth adding to your product line?

By Dave Hershman

How do you feel about originating reverse mortgage loans? I am thinking about adding this product to my offerings in the coming year.

Carl from Florida

I feel really good about the product if used in the right way. It is a program that can benefit many Americans. If you look at the demographics of America, the population in general is aging and many of those who are retired have significant equity in their properties but don't have income to live day-to-day. The reverse mortgage used correctly can address that situation. According to the U.S. Census Bureau, approximately one-third of owner-occupied homes do not have a home loan. The number is even higher for older Americans and certainly Florida would have even higher numbers in this regard.
On the other hand, I don't feel good about adding this to an already robust product line. A reverse is a very unique product which requires time and effort to master. Even the marketing of this product requires a different approach. For example, older people tend to be less technology savvy -- which means more face-to-face meetings. They are going to be very nervous, which means lots of hand-holding. The segments of your sphere which produce referrals will also vary. Though real estate agents are helpful, here you are looking to partner with financial advisors.  Conclusion? It is a great segment but not something you dabble in. 

Do you have a reaction to this commentary or another question you would like answered? Email Dave at [email protected].
Dave Hershman has been the leading author and a top speaker for the industry for decades with six books authored and hundreds of articles published.   His website is  If you have a reaction to this commentary or another question you would like answered in this column? Email Dave directly at [email protected].