Nov/Dec 2021 RMM

Lasting Success Our team provides unparalleled customer service and numerous reverse mortgage resources. Whether you are trying to expand your business or are looking for new ways to streamline your current process, PRC is your partner in lasting success. (800) 542-4113 PRClosings.com Interest in such products goes well beyond jumbo loans. Borrowers might want a private-label product to buy a condo that isn’t FHA approved, he says as an exam- ple. Or, if they want to ensure that both spouses are on the mortgage, and one of them is below the minimum age of 62 required for a HECM, then a private-label reverse mortgage will be attractive. His company also works with a lot of borrowers or contractors involved in 55-plus com- munities who find a reverse mortgage a sound option for a purchase. The past year “greatly exceeded” what they thought would be a good year for private-label products, he says, adding that traditional HECMs also were strong because of low interest rates and strong home valuations. He expects next year to be strong, especially as prod- ucts continue to be tweaked to meet client needs, such as streamlining the process to qualify borrowers. “We have other innovations like that in the works,” O’Neil says, add- ing that RMF’s private-label products are in 26 states and DC, covering two-thirds of the U.S. population. If states, such as Tennessee and Maryland, remove restrictions that prohibit such products, he says, he expects private-label products to take off further. Barry Sacks, a pension attorney and author in San Francisco, CA, believes many more retirees can bene- fit from housing wealth as a cushion against occasional downturns in their securities portfolios (such as 401(k) accounts or rollover IRAs) that are their primary sources of retirement income. As he researched the idea, he initially looked at HELOCs. But they require a monthly payment, which eats into a retiree’s cash flow. Sacks soon landed on the reverse mortgage as a solution and has been writing about retirement and reverse mortgages since 2004. Among his influential articles is a 2012 piece in the Journal of Financial Planning that he co-authored with his brother, Stephen Sacks, a retired economics professor. In that arti- cle, and in subsequent articles, they advocated the use of home equity, accessed by a reverse mortgage credit line, to supplement retirement income. “It’s to replace the draws from a volatile securities port- folio, when the portfolio has experienced a downturn, with a draw from another source. The other source, the reverse mortgage credit line, has two benefits: (1) It doesn’t have to be paid back while the retiree still lives in the home, so during that time there’s no negative impact on the retir- ee’s cash flow; and (2) Skipping occasional draws on the portfolio allows the portfolio to better recover from the downturn, thereby enhancing the durability of the port- folio,” says Sacks. Sacks continues to advocate for the product, particu- larly when it comes to raising its profile among financial planners. “It has become more accepted,” he says. “But greater acceptance still has a long way to go.” REVERSE MORTGAGE / NOVEMBER-DECEMBER 2021 21