payments while giving them another source of income in retirement. The long-term uptick in home prices also makes reverse mortgages attractive, lenders say. Homeowners have more equity than ever to tap into. And given the shortfalls in many people’s retirement accounts, they are going to need it. High interest rates, meanwhile, mean reverse home equity lines grow faster than they would in a low- rate environment, creating additional benefits for the reverse product. Another side effect of higher rates is a decline in refinancing for forward and reverse mortgages. Industry observers expect the decline could prompt forward lenders to take a closer look at reverse products, particularly if home sales remain sluggish. “We’ve been trying for years to break into the forward mortgage industry,” says Lawler. “Our best timing for that is when their refi market has dried up and then they go, ‘Hey what’s that reverse mortgage industry everyone kind of whispers about?’” In fact, Lawler says her firm sees potential opportunities from large banks interested in the product. Bay Docs is looking to work with at least one large bank, she adds. The due diligence, however, has been taking time. Richins is also optimistic about a potential influx of new borrowers, as well as a growing openness among seniors looking for ways to shore up their finances. Many seniors entering retirement still have monthly mortgage payments. “We’ve got people who are looking online for options on how to reduce their monthly payments, especially with the high interest rates in the current mortgage market,” she says. To help lenders and servicers, FHA has published a comprehensive guide to HECMs, consolidating information that had been scattered across more than 100 policy documents. The new guidance, included in the SingleFamily Housing Policy Handbook 4000.1, also creates a more flexible framework for updating regulations, federal officials say. “HECM mortgages are an important tool to help senior homeowners age with security and dignity in their own homes,” Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon said in a statement. “The completion of the HECM sections of our Single Family Handbook reinforces FHA’s commitment to the HECM program and is part of a larger effort to retool the program for long-term success.” Joel Berg is a writer and editor based in York, PA. “We’ve been trying for years to break into the forward mortgage industry. Our best timing for that is when their refi market has dried up and then they go, ‘Hey what’s that reverse mortgage industry everyone kind of whispers about?’” —Megen Lawler, owner of Bay Docs Julia Gordon REVERSE MORTGAGE / JANUARY-FEBRUARY 2024 21
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