Recently released Home Mortgage Disclosure Act (HMDA) data examined by Urban Institute researchers Karan Kaul, Sarah Strochak and Laurie Goodman – and published in a recent blog post – offer insights into who uses HECMs and how that compares with other conventional home equity extraction loan products.
- Reverse mortgages were the least popular method for extracting equity in 2018;
- White and black Americans make up a larger share of reverse mortgage lending than forward home equity lending;
- Asian and Hispanic Americans generally make up a larger share of forward home equity lending than they do of reverse mortgages;
- Hispanic reverse mortgage borrowers have higher property values than their white counterparts; and
- Black homeowners tap reverse mortgages at much older ages than other races.
“Whether driven by location, borrower equity, preference, or other reasons, these differences leave us with one important takeaway: future changes to the HECM program must consider any potential for disproportionate impact by race or ethnicity,” said the researchers.