From the Top continued on page 12 retirement plan or “rainy day” fund. People are still using reverse mortgages for home modifications and improvements. It has leveled off a little bit, but we had a good number of people early in the year refinancing when rates were really low, and they wanted to take advantage of home appreciation. We still see people who are paying down high-interest credit card debt or getting rid of their mortgage payment. Because COVID hit the senior demographic so hard, it made people reassess where they were financially. COVID became a real-life example of, when you’re dealing with something unexpected, how prepared are you? I think the reverse mortgage, as a tool to help people be prepared, has become more of an actual solution than prior to COVID. RM: Like many lenders, AAG has educated financial planners, CPAs and others that home equity should be viewed more strategically in retirement plans. What impact have these efforts had on AAG’s business and client base? PF: I’ve talked to my own friends who are financial planners and many of them don’t have the tools to analyze a reverse mortgage as part of a retirement strategy. They often refer people over to a reverse mortgage company, so we can see where it fits. On our field sales side, which Jesse Allen oversees, we are seeing more affluent consumers coming through that channel. On the call center side, I am now seeing nearly a 50/50 split of “needs” versus “wants” borrowers with most of the latter tending to be more affluent homeowners who want to use a reverse mortgage strategically as part of a way to add to their asset pool. RM: Has the average age of your clients dipped? PF: We’re still right around 71 or 72, but when I entered the business, it was more like 79. Over the last ten years, it has steadily come down. These are interesting times. FHA loan limits continue to grow. There are more proprietary products in the marketplace, and many of them are featuring lower age restrictions below 62. These factors are all driving younger homeowners to seek a reverse mortgage. This is all good. A lot more people turning 62 want to be unburdened by massive financial responsibility, and the more tools that are available to help them achieve those goals is a plus. From the Top REVERSE MORTGAGE / JANUARY-FEBRUARY 2022 11
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