The Reverse of the Credit Crisis - Reverse Mortgages
We're growing downright numb to hearing about all the horrors related to the current credit and mortgage crisis. Its a wicked thing making a wake through our entire economy.
Of all the loan officers I know throughout the U.S. if I took a poll of how business is and what they expect for next year it would be quite grim. I Personally know people who are down to 1/4 of their '06 business.
And they all seem to have one thing in common. They are all in the forward mortgage market. The reverse mortgage end is doing quite swimmingly.
The reasons are really two and a half fold. The first and most important is reverse mortgages by their very nature do not obligate the borrower to make payments. It's why people get reverse mortgages in the first place.
The reverse mortgage company simply needs to lend such that it creates enough cushion between the value of the home and the cash it allows a borrower to pull out. As long as enough cushion exists here its a fairly safe deal for the lender.
Adding to the recipe, the over 62 market is growing like a weed. Many demographers believe the over 62 population will double by the year 2030.
Furthermore, with the ever increasing cost of living and this group's propensity to save less than its parents, the need for additional income will persist.
And lastly, to a lesser extent, the current state of the stock market is simply making my phone ring. Many seniors have lost much of their net worth in the last year. Many are not feeling so financially comfortable.
You can imagine how this group feels. The proverbial rug has been pulled out from under them, and they are groping for some financial tool to create some feeling of safety.
Where things go, economically, in the coming years in anyone's guess. Home values are falling with no real end to the recession in sight.
The real nemesis to the reverse mortgage industry is home values reducing radically. Outside of this fairly unlikely occurance it seems the future looks bright.
Of all the loan officers I know throughout the U.S. if I took a poll of how business is and what they expect for next year it would be quite grim. I Personally know people who are down to 1/4 of their '06 business.
And they all seem to have one thing in common. They are all in the forward mortgage market. The reverse mortgage end is doing quite swimmingly.
The reasons are really two and a half fold. The first and most important is reverse mortgages by their very nature do not obligate the borrower to make payments. It's why people get reverse mortgages in the first place.
The reverse mortgage company simply needs to lend such that it creates enough cushion between the value of the home and the cash it allows a borrower to pull out. As long as enough cushion exists here its a fairly safe deal for the lender.
Adding to the recipe, the over 62 market is growing like a weed. Many demographers believe the over 62 population will double by the year 2030.
Furthermore, with the ever increasing cost of living and this group's propensity to save less than its parents, the need for additional income will persist.
And lastly, to a lesser extent, the current state of the stock market is simply making my phone ring. Many seniors have lost much of their net worth in the last year. Many are not feeling so financially comfortable.
You can imagine how this group feels. The proverbial rug has been pulled out from under them, and they are groping for some financial tool to create some feeling of safety.
Where things go, economically, in the coming years in anyone's guess. Home values are falling with no real end to the recession in sight.
The real nemesis to the reverse mortgage industry is home values reducing radically. Outside of this fairly unlikely occurance it seems the future looks bright.
About the Author:
To get a great guide discussing the workings of the California reverse mortgage go here. For a great Q&A site for the California reverse mortgage questions, you should follow this link.
posted by Debt Consolidation Loan at
11:08 PM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home