May-June2020 Issue

New Castle has shrunk over the years as HECM endorsements plunged in Tennessee from a peak of 1,587 in 2009 to 507 in 2019. But Holton remains optimistic about the future. “For us in the field, if there’s a wave, you catch it and you ride it. So, we’re in that frame of mind right now,” he explains. Others, though, see a market struggling to gain traction. The region’s borrowers still are largely needs-based and often fail to qualify under the higher thresholds needed to become eligible for a reverse mortgage. And even when they do, the upfront costs often turn them away. “They are still tough loans to get done,” says Jimbo King, a partner at McGowin-King Mortgage LLC in Mountain Brook, AL, a suburb of Birmingham. Lower-cost private-sector reverse mortgages—also known as conventional or proprietary products—are a potential alternative, King and other lenders say. But few of the newer products are on the menu in the Southeast, where home values are lower. The private-sector products generally target homes with values above the HECM limit. No such products are available in Tennessee, despite pockets of high-value homes in areas like Nashville, says Loren Riddick, CRMP, national director of reverse lend- ing for Thrive Mortgage in Alcoa, TN. (Note: State law prohibits non-FHA reverse mortgages from being offered.) “I’ve got ten or 15 clients who are just waiting for that ball to drop,” Riddick says, adding that some have been waiting more than three years since first asking him about them. “They’re just ready to go for those unique products.” One roadblock for the reverse market, at least, seems to be falling away, lenders say. Southerners have long con- sidered the home as an asset they want to hand down to the next generation. As a result, they have looked suspi- ciously on reverse mortgages out of fear they might lose their homes. It is not true, lenders say, but it has been a factor, nonetheless. “When a person feels like they need to leave the house or some equity to their children, it’s a hard hurdle to get over,” says Calamia, the lender in Louisiana. But, she says, it is proving to be less of an issue for younger Baby Boomers. Their children have moved away or established their own homes. “It will be easier for them to accept that this is a viable product,” she says. In fact, financially-savvy Boomers in the Southeast are starting to see reverse mortgages as a way to protect other assets for their children, says Julie Melser, a reverse mortgage loan originator for Homebridge Financial Services in Greenville, SC. “I’m definitely seeing an uptick in borrower-driven requests for infor- mation on the loans, which has been nice,” she says. Melser says she also has seen an increase in interest with the HECM for Purchase product. “I think more Realtors are looking for options and starting to realize that the Boomer market is where they need to be,” she asserts. For other lenders in the Southeast, builders have been the key to unlocking the potential of the HECM for Purchase. Support is coming from companies, like Epcon Communities and Del Webb, both of which are active in building 55-plus developments. “That’s blowing up down here,” says Lance Canada, a CRMP with Victorian Finance LLC in Durham, NC. People who sell expensive homes in California, New Jersey or New York could pay cash for a new home in North Carolina, Canada says. But the HECM for Purchase allows them to set some of that money aside. “It just helps people protect their assets,” he says. “Why put all that money into the home if the only benefit is not to have a mortgage?” CRMP Greg Gianoplus is espe- cially bullish on the HECM for Purchase. He is building up the busi- ness as channel leader of the reverse division for Wilmington, NC-based Alpha Mortgage Corp. He sees poten- tial clients in people who are moving into North Carolina, as well as those moving within the state. Retirees from the banking capital of Charlotte, for example, may want to relocate to coastal North Carolina. Alpha Mortgage is partnering with builders and Real- tors to market the HECM for Purchase, Gianoplus says. Southeast continued on page 32 Jimbo King Greg Gianoplus Julie Melser REVERSE MORTGAGE / MAY-JUNE 2020 31