In their place, King says, he is seeing more borrowers of last resort, people who need HECMs to pay off high-interest credit card debt or address other financial pinches. “The most rewarding ones that we do are the people who need it the most,” King says. “That’s the closing when you really feel good.” At PHH, the chief factor for many reverse borrowers has been to clear their mortgages, Kent says. “It’s like an immediate increase in cash flow.” Other borrowers this year were looking to pay off other debt or make home improvements, he adds. “But the one piece that makes the most sense and is probably the biggest motivating driver is paying off that first mortgage.” A Promising Purchase Market Lenders were keeping an eye on the HECM for Purchase business in 2023, a small subset of the larger reverse market that has shown signs of life. The market holds significant promise. According to data from NAR, Baby Boomers accounted for 39 percent of home purchases in 2022, or roughly 2.23 million, Mayer says. However, there were only 2,063 endorsements for HECMs for Purchase. Shrinking home sales in 2023 did not help to advance the market. However, home sales are projected to bounce back in 2024, according to NAR. The trade group expects a 12.9 percent drop in existing home sales this year followed by an increase of 15.5 percent in 2024. Prices may follow the upward trend, with the association projecting a 2.6 percent rise in median prices nationwide, albeit with regional variations. In the West, which has the most expensive homes, prices may continue to slide, while the Midwest will see an uptick. Reverse lenders, however, have not been idle this year in the face of a slower market. Longbridge, for instance, has been teaming up with builders and real estate professionals, Mayer says. “This year alone, we have signed agreements with two of the largest homebuilders in the country and are now working with their teams to educate them about how reverse mortgages work and how they can help bring more buyers to the table,” he says. Adapting: Part 2 continued from page 25 Jimbo King 26 REVERSE MORTGAGE / NOVEMBER–DECEMBER 2023
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