REVERSE MORTGAGE LENDERS are seeing diverse impacts from the steady rise in interest rates through the first part of 2022. Higher rates are translating into lower loan proceeds for HECM borrowers, and they are putting the brakes on HECM-to-HECM refinancings, lenders say. At the same time, higher rates are spurring greater interest in private-label reverse mortgages and the HECM for Purchase product, which may now compare more favorably to forward mortgages for certain borrowers. Overall, however, the needs of borrowers are not changing. People will continue to look at reverse mortgages to finance aging in place or to tap into their home equity for other purposes, according to Scott Norman, vice president of field retail and industry relations for Finance of America Reverse (FAR). “People don’t like rising interest rates,” he says, noting that rates still remain at historic lows. “But at the end of the day, I don’t think it’s deterred the overall appeal of reverse mortgages.” The Federal Reserve began lifting a key interest rate in March with a goal of tamping down inflation without stifling economic growth. The increase in March Adjusting to Higher Interest Rates What Rising Rates Mean to Reverse Mortgage By Joel Berg Scott Norman 24 REVERSE MORTGAGE / JULY-AUGUST 2022
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