Finance of America Says Reverse Mortgages ‘Important’ to Diverse Product Line
While the total number of reverse mortgage industry professionals attending HW Annual in Frisco, Texas last September was small compared to the number of term mortgage lenders and sellers, one senior executive mortgage company dedicated some of its time during a panel at the event to discuss the importance of reverse mortgages to a full and diverse line of products.
Kathryn Amor, Product Manager at Finance of America Companies, spoke at the event’s mortgage buying market panel about what Finance of America Reverse (FAR) brings to the largest parent company. To deepen the relationship between FAR and its parent company, RMD sat down with Amor to get a better idea of what the reverse mortgage division and its products bring to the proverbial table of the largest organization.
An “important” element of product diversity, smaller does not always mean “niche”
When asked specifically what the reverse adds to Finance of America’s largest organization, Amor described a product category with a unique feature set that allows the largest company to demonstrate just how much it can be complete as a provider of different types of mortgage solutions.
“Reverse mortgages are an important product in Finance of America’s diverse line of flexible, end-to-end consumer lending solutions spanning the entire spectrum of home equity and finance,” he explains. -she. “They complement the offerings of our Finance of America Mortgage and Finance of America Commercial businesses and, more broadly through Finance of America Reverse, bring increasingly important and flexible alternative financing options to our discussions with clients throughout the year. their financial journey. “
Part of the reason the company remains committed to turning the tide is due to demographic and borrowing trends, and both of these tell FOA that reverse mortgages are not only potentially effective for seniors, but that ‘they are also particularly suited to meet the needs of older people who continue to face a retirement funding crisis.
“We look at market dynamics and long-term loans and aim to develop and deliver innovative products that we believe meet an evolving set of consumer financing needs at different stages of life and across the lifespan. changing business cycles and borrowing terms, ”she said. “Our belief is that as interest rates rise, borrowing will become more difficult and expensive, limiting many consumers’ access to finance. Our goal at Finance of America is to be a trusted and reliable partner for consumers who are always available to them regardless of market conditions to provide the right products and sound advice that meet their specific needs.
Amor is also quick to point out that smaller reverse mortgage volume figures relative to the term side do not necessarily mean reverse mortgages are a ‘niche’ product offering, while also offering a “niche” product offering. desire to be complete in the mortgage lending space requires having a reverse offering of some sort.
“Reverse mortgages have been part of our lending solutions toolbox since our founding,” she says. “And in our opinion, no balanced product strategy is complete without it. Reverse Mortgages are a key part of our diversification and an essential product offering that helps us provide clients with a more comprehensive set of financing alternatives. I guess you can say the reverse is in our DNA.
Reverse mortgages and the buying market
When it comes to serving any mortgage client 55 or older, Amor says leaving out a reverse mortgage option of any kind can potentially make the process incomplete. Whether through FHA-backed or proprietary loan options, the amount of functionality available with both products has the potential to meet the needs of seniors more effectively than strictly forward-looking mortgage options.
“Finance of America Reverse offers innovative solutions that our industry needs to help older Americans achieve their retirement dreams through rational use of home equity to finance their non-working years,” she says. . “FAR is a leader in reverse mortgage product innovation and uses a judicious blend of ingenuity, technology and education to develop and deliver retirement solutions well ahead of market needs. “
Older homeowners who may be looking for a new home may also face the hurdles that come with the cohort’s collective financial hardship, but reverse mortgage product options may present a solution for homeowners who find themselves in this situation, says -she.
“We know that many aging homeowners have not saved enough to have financial flexibility in retirement and are in huge debt, which makes their ability to obtain financing through traditional products very difficult and expensive,” he says. she. “At the same time, the equity in their homes continues to grow. Reverse mortgages are a compelling and alternative way to tap into that equity and provide many seniors with financing so they can retire in their homes.
Product education and the need to connect
Nonetheless, echoing the concerns of many in the reverse mortgage industry, Amor highlights the lingering issues related to product awareness and borrower education regarding reverse mortgage products and obligations.
“One of the biggest bottlenecks between older Americans and financial flexibility in retirement is knowledge of reverse mortgages and the understanding that it is a safe and sound funding tool,” says she. “This is why education is the centerpiece of the FAR mission. People have not been fully informed of all the flexible options, including reverse mortgages, that are available to modern borrowers today or they have preconceptions based on dated or erroneous information about the old ones. reverse mortgage industry products.
This extends to the lack of knowledge of reverse mortgage options that are not guaranteed by the FHA, such as the proprietary reverse mortgage products offered by FAR and other major lenders. One of the ways FOA hopes to change that is the availability of the front-to-back hybrid product offering, EquityAvail, announced earlier this year.
“It’s a one-of-a-kind hybrid product that combines aspects of traditional and reverse mortgages to provide a greater option for retired or near-retirement homeowners – whom we call ‘pre-retirement’ – and helps improve cash flow and stability while preparing them better to deal with unforeseen expenses, ”she said.
In terms of ways in which the business and the broader reverse mortgage industry can address concerns about education and the proliferation of accurate product information, Amor describes the need for continued national efforts to expand the consumer knowledge base on lending later in life.
“This is a critical period in our history, where a holistic approach to retirement planning and access to alternative financing products that leverage the responsible use of home equity are a necessary complement to existing retirement efforts, especially if we intend to adequately support the growing segment. people at or near retirement age, ”she said. “Whether it’s rising health care costs, lengthening our lifespan, or shrinking benefit plans like pensions, many Americans just don’t enough money to afford a retirement.
Look for an additional perspective from Kathryn Amor soon.