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Reverse Mortgages Rapid Expansion
Until a few years ago, reverse mortgages were
virtually an unknown financial tool. However, the
loan volume has climbed from fewer than 7,000 HECM
loans (HECM is the federally insured reverse
mortgage product insured by the Federal Housing
Administration [FHA]) in fiscal 2000 to over 43,000
in 2005 and over 76,000 in 2006 according to the
U.S. Department of Housing and Urban Development
(HUD). HECM’s account for 90% of all reverse
mortgages made in the U.S. today.
The Market
- There are approximately 15 million eligible Senior
households in the U.S.
- Seniors own more than $2 trillion in untapped
housing wealth in the U.S.
- Over half the net worth of seniors is currently
illiquid in their homes and other real estate.
- With baby boomers about to reach retirement age,
that number will more than double in the next ten years.
Market Penetration
- The reverse mortgage market penetration is about
1% of the potential market. With the huge number of
baby boomers becoming eligible each year, the
untapped potential remains enormous.
| Eligible defined: |
13.2 million (48%) can get a
reverse |
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mortgage loan of $20,000 or more 1.8 million
can get a reverse mortgage loan of less than $20,000
(2005 National Council on Aging Study) |
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