The HUD/FHA Reverse Mortgage for Home Purchase Program has been slow to take off. The program was formalized by HUD to begin taking place around the first of January 2009. After a quick initial jump in number of fundings, the rate hovered around 130 units per month nationally for the last 6 months of the year. I joined HomeServices Lending, a joint venture between HomeServices of America, a Berkshire Hathaway company and Wells Fargo Home Mortgage in May to do my part in changing the growth pattern. My area of concentration will be to promote the use of this powerful financing tool for seniors wishing to purchase their "final" retirement home.
With an estimated 10,000 baby boomers hitting 62 on a daily basis, many will be out there looking for more suitable housing. They wish to buy a new home without having to make monthly payments which is only possible by either paying all cash or taking out a Reverse Mortgage. I feel, like many other vetrans of the Reverse Mortgage industry, that within a decade that this product could constitute as much as 50% of the total volume.
The idea of this possibility germinated with me while taking my very first Reverse Mortgage application in March of 1993. My client asked me a simple question during the signing of the documents. Katharine asked me "why did I have to close on the purchase of my new house before I could take out a Reverse Mortgage on it?" I thought that that was an excellent question and that it was really unfair to seniors having to pay double closing costs.
I was absolutely elated when the program became legitimate last year. I do hope that Realtors take a look at which homes are suitable for seniors and then at least present prospective clients with the possibility of using this type of financing. I'm looking forward to sharing information about this program with agents both in and out of the Prudential California network of professional real estate brokers and agents.
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