July-Aug 2020

COVID-19 Boosts Reverse Mortgage Appeal in Upper Midwest With Stocks Down, Lenders Find Clients Need More Resources By Joel Berg Editor’s Note: This article is part of a series through 2020 in which Reverse Mortgage magazine is examining different regions of the country. This issue focuses on the Upper Midwest. THE COVID-19 PANDEMIC has thrown up numerous obstacles to closing reverse mortgages in Upper Midwestern states. But at the same time, the crisis has underscored the value of the product as a tool for bolstering personal finances. Many borrowers turned to the Home Equity Conversion Mortgage (HECM) this spring as their retire- ment assets shrank and their financial advisers cast around for sources of income. But the renewed attention is not a function of the pandemic alone, lenders point out. It reflects ongoing efforts to develop relationships with financial advisers and to explain the features and benefits of reverse mortgages, particularly their role in supplement- ing retirement income. “We’re seeing immediate results from that,” says Harlan Accola, CRMP, national reverse mortgage director for Fairway Independent Mortgage Corp. in Marshfield, WI. Accola says his firm saw applications double in March, as the stock market careened and investors puz- zled over the damage that COVID-19 might wreak on the U.S. economy. Retirees figured they should take equity from their homes rather than deplete their already-battered investments. “I think that’s something that’s going to continue,” Accola says. “People are waking up to the fact that this is an alternative.” If so, it would be welcome news to reverse mortgage lenders inUpperMidwestern states, which ReverseMortgage magazine defines as Arkansas, Illinois, Iowa, Michigan, Minnesota, Missouri, North Dakota and Wisconsin. The states hit their peaks for HECM originations between 2007 and 2009 but have seen loan counts dwindle ever 28 REVERSE MORTGAGE / JULY-AUGUST 2020