March-April 2021

2020 WAS EXPECTED to be a break-out year for pro- prietary reverse mortgages. But, as with so many other expectations, COVID-19 intervened. It wasn’t so much the virus itself that changed the course of the proprietary market. It was the economic response, which continues to shape the market this year, even as vaccines promise an eventual end to the pandemic. As the economy wobbled inMarch and April 2020, the Federal Reserve slashed interest rates to spur growth. It was good news for the traditional Home Equity Conversion Mortgage (HECM) and fueled a boom for the product. But the low rates made it harder for proprietary products to compete, not just with HECMs but also with mortgage refinancings, which soared last year. Though interest rates are forecast to stay low through the rest of 2021, industry executives are bullish on pro- prietary reverse mortgages. They see opportunity to gain ground, especially among the millions of older Americans who already borrow against their homes but don’t take out a reverse mortgage. “We’re very optimistic about the future of proprietary products and how they’re going to cater to consumers Prospering With Proprietary Low Interest Rates Hinder Product Growth, but Experts Remain Bullish By Joel Berg 28 REVERSE MORTGAGE / MARCH-APR I L 2021