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 over 90% of all reverse mortgages originated 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.