The stock market is another factor that could play into the adoption of reverse mortgages. The loans can serve as a hedge if the stock market stumbles. Rather than continue drawing from a depleted pool of savings, a retiree could use a reverse mortgage to tap into home equity instead, Peskin says. It’s a scenario that has helped persuade financial planners to see the value of a reverse mortgage in a balanced retirement portfolio. A constraint on the growth of private-label reverse mortgages is the patchwork of state rules. While lenders have lowered the age limit over the past year on some of the private-label products, the drop does not apply to every state where the products are sold. And the products are not approved in every state. Equity Elite, for example, is available in more than 20 states, Peskin says. But as of the fall, 19 states had Private-Label Products continued from page 19 1st Nations Reverse Mortgage American Advisors Group Finance of America Reverse Liberty Reverse Mortgage Product Name Premier HomeSafe HomeSafe EquityIQ™ Maximum Loan Limit $1.5 million $4 million $4 million $4 million Minimum Age 60 60 (62 in TX and UT) 55 (60 in MA, NY and WA; 62 in TX, UT, NC) 60 (62 in TX and UT) Home Purchase Allowed Yes, with seller/ interested party contributions to 6%. Yes. Lender credits and seller concessions are permitted. Yes. Lender credits and seller concessions are permitted. Yes. Lender credits and seller concessions are permitted. seller/interested party contributions to 6%. NBS Allowed No Yes, with additional requirements Yes, with additional requirements No Minimum Property Value $450,000 $1 million. HomeSafe must be a benefit over HECM. None $250,000 (Appraisal value below $350,000 will apply a 5% LTV reduction) Minimum FICO 680 N/A N/A 640 Payment Options Lump sum and LOC (LOC allows for repayable draws for the first ten years). Lump sum Line of credit (Select) Lump sum (Standard) Flex payment (Flex) Line of credit (Select) Hybrid (EquityAvail) Lump sum only. States Allowed For fixed rates: AL, AZ, CA, CO, CT, FL, GA, ID, IL, LA, NM, MI, MO, NC, NV, NJ, OH, OK, OR, PA, SC, TX, UT, VA For LOC: AZ, CA, CO, FL, NC, NJ, SC and OR HomeSafe Standard and HomeSafe LESA: AZ, CA, CO, CT, DC, FL, GA, HI, ID, IL, LA, MI, NJ, NV, OH, OR, PA, RI, SC, TX, UT, VA and WA HomeSafe Select: CA, CO, FL, HI, TX HomeSafe Standard: AZ, CA, CO, CT, DC, FL, GA, HI, ID, IL, LA, MA, MI, NC, NV, NJ, NY, OH, OR, PA, RI, SC, TX, UT, VA, WA HS Select: CA, CO, CT, DC, FL, GA, HI, IL, OR, SC, TX, VA HomeSafe Flex: CA, CT, FL, HI, NJ, SC, TX HomeSafe Select: CA, CO, CT, DC, FL, GA, HI, ID, IL, LA, NC, NV, OR, SC, TX, VA EquityAvail: CA, CT, FL, NJ, SC, VA, TX Brokered: AZ, CA, CO, DC, FL, GA, ID, IL, NJ, NM, NV, OR, PA, TX, UT, and VA. Agent: AZ, CA, CO, FL, IL, PA, TX, and UT. Private-Label Products Comparison Chart 20 REVERSE MORTGAGE / JANUARY-FEBRUARY 2022
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