Longbridge also embarked on a HECM for Purchase road show over the spring and summer with the goal of educating its partners on the value of the product, Mayer says. “Many of our loan officer partners have existing relationships with real estate agents and builders,” Mayer explains. “By educating their partners on HECM/Reverse for Purchase financing and how to implement and market to mature homebuyers and sellers, it could have an impact on their overall purchase volume.” To handle the uptick in purchase volume, Longbridge created a dedicated purchase fulfillment team to ensure closing dates are hit. “We anticipate that as education on HECM for Purchase continues to increase and becomes more readily available, the demand for the product will continue to grow,” Mayer says. Demand is growing in Alabama, where King says he has arranged HECMs for Purchase for several borrowers moving from states where the reverse product is better understood—including California and Florida. “I’m bullish on that,” King says. “It’s a great option that makes way too much sense.” People are moving to Alabama because of the climate but also because of the lower cost of land and homes, he adds. As of June 2023, the median home price in Alabama was $286,000 compared with $409,000 in Florida, according to research from BankRate.com. “They seem to be happy once they get here, too,” he says. Riddick, who is based in Alcoa, TN, has been pitching the HECM for Purchase as an option for older homeowners who want to maximize their buying power and eliminate mandatory mortgage payments while downsizing to a smaller place, such as a condo. Real estate agents get a listing, Riddick says. But they also can play a role in two transactions: the sale of the original home and the purchase of a new one. Wealthier borrowers may not need the cash for a new home, Riddick says. But they can use a HECM to create a line of credit. Borrowers may balk at the upfront costs of a reverse, but they can be counterbalanced by the credit line’s potential growth, which is faster when interest rates are high. The trade-off can be complex to explain, Kent says. But for a subset of borrowers, the math does make sense. “That’s the whole idea of trying to use the reverse mortgage as part of your retirement plan,” he says. NATIONWIDE REVERSE MORTGAGE FIELD SERVICE EXPERTS FOR OVER 30 YEARS 1.800.639.2151 www.nfronline.com Inspections - Preservation - Insurance Loss Inspections - Violation Management - Vacant Property Registrations - Utility Management - REO Services - Special Services REVERSE MORTGAGE / NOVEMBER–DECEMBER 2023 27
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