WHEN INTEREST RATES plunged in 2021, Americans rushed to refinance their homes, fueling a spike in business for forward and reverse lenders. Low rates also helped drive interest in reverse mortgages, since they allowed homeowners to cash out more of their equity at a time when home prices were rising rapidly. Two years later, rates are well above their COVID-19 pandemic-era lows, impacting the entire mortgage universe. The refinance business has all but dried up, and forward and reverse loans have become a harder sell, albeit for different reasons. On the forward side, borrowers are facing high prices and a dearth of homes on the market. On the reverse side, high interest rates reduce the cash that borrowers can pull out of their homes. “Interest rates are really the story that has been the most challenging for the year,” says Michael Kent, senior vice president of corporate Adapting: Companies Regroup, Part 2 Lenders Responded to Challenges Created in 2023 By Joel Berg 24 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2023
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