Report Says Seniors Retain More Equity Than Other Homeowners-ca1816

Mortgage-Refinance Reverse mortgages will play a big part in funding retirement for millions of Baby Boomers who will be exiting the workforce and entering their golden years over the next 10 years, says Cantor Fitzgerald, the global investment banking and financial services firm. The Baby Boomer demographic itself estimated to be somewhere around 75 million, or about 25% of the population will be one of the biggest growth drivers of the industry. But the continued growth in demand for reverse mortgages is attributable to much more than that. In a research report by Cantor, the evolution of the product itself has been a key .ponent in the steady adoption of reverse mortgages as a mainstream option for retiring seniors. From the adoption of private .panies offering the loans (originally, Fannie Mae was the exclusive reverse mortgage investor) to the increased regulation imposed by the Federal Housing Administration, the industry has undergone numerous transitions in a short period of time. The participation by FHA in constructing and implementing mandates and protections for consumers in particular is greatly responsible for the growth in demand for reverse mortgages. Today, the only government-insured reverse mortgage product is called the Home Equity Conversion Mortgage, or HECM, and its available through FHA-approved lenders that require potential borrowers to attend one-on-one sessions with an independent councilor to make sure they understand the product entirely. Its the inclusion of regulations and consumer protection clauses like these that have helped to bring new borrowers to the marketplace that may not have otherwise felt .fortable enough with the product, the Cantor report said. The report also mentions that senior reverse mortgages lending volume actually slowed in 2010, but is expected to rebound quickly thanks to sheer volume. According to the National Reverse Mortgage Lenders Association (NRMLA), the total value of home equity held by seniors at the end of last year could be as much as $3.3 trillion. Moreover, seniors with substantial equity built up have seen the value of their equity fall less than the total population of U.S. homeowners in the past few years. Following the wake of the housing crisis, todays seniors suffered an 18% decline from their peak levels of average equity values, versus a decline of 31% for other homeowners. The bottom line, according to the NRMLA, is that home values are continually falling to new lows (for March 2011, the S&P/Case-Shiller home-price index reported that median home values for many cities have actually dipped below price levels seen during the housing bubble bust.) At the same time, seniors are retaining equity in their home, a golden ticket to security many will need to tap in order to enjoy and outlive their retirement. About the Author: 相关的主题文章: