Senior housing wealth reaches record $7.54 trillion

Senior homeowners are getting richer. According to The National Reverse Mortgage Lenders Association (NRMLA), senior home values outpaced increasing amounts of mortgage debt, contributing to continued growth in senior homeowner’s wealth. As a result, in the first quarter of 2020, the housing wealth of homeowners age 62 and older increased by $120 billion, to a record $7.54 trillion, up 1.6% compared to Q4 2019.

Furthermore, the quarterly Reverse Mortgage Market Index released by NRMLA and RiskSpan, Inc., a data management, quantitative risk management analytics, and visualization tools provider, hit 271.58 marking another all time high since the index was first published in 2000, according to NRMLA.  

The Q1 2020 NRMLA & RiskSpan index shows senior homeowner’s wealth benefited primarily from an estimated 1.4%, or $132 billion increase in senior home values, offset by 0.7%, or a $12.3 billion increase in senior-held mortgage debt.

“COVID-19 has impacted millions of families and their retirement portfolios,” said NRMLA President Steve Irwin. For example, a new study from the Center for Retirement Research at Boston College indicates that “market shocks are a growing concern for many families whose retirement assets are in 401(k) plans.”

Data show, when COVID-19 emerged in March, the stock market fell by 35% in one month. While the market has largely recovered since, it remains very volatile. For most households, 401(k)/IRA assets are their largest financial asset, other than Social Security.

“The responsible use of home equity may be an option to help mitigate certain market risks and help seniors stay financially secure during future market disruptions,” said Irwin.

Reverse mortgages, available to homeowners age 62 and older with significant home equity still are an important financing tool, according to NRMLA, which represents over 90% of reverse mortgage transactions in the country. To date, more than 1.17 million households have utilized a Federal Housing Administration insured reverse mortgage to help meet their financial needs.

Survey: 85% of seniors worry about COVID-19 & retirement

American seniors are feeling uncertain about their future in retirement. An overwhelming 87.5% of the over 1400 people aged 60 or older who were surveyed by reverse mortgage lender, American Advisors Group (AAG), to better understand how seniors are reacting to the financial effects of COVID-19, said they have “at least some level of concern.”

The AAG COVID Market Survey Series shows that as of April, participants’ concerns about their portfolios ranged from slight to extreme. Nearly 80% believe the pandemic will affect their retirement lifestyles “to some degree.”

Nonetheless, nearly 95% of participants said they are not considering selling any of their assets to fund retirement needs.

“Seniors are worried about their financial future due to the effect that COVID-19 has had on the stock market,” said AAG Chief Marketing Officer Martin Lenoir. “The market volatility has had a huge impact on American retirement portfolios, which has led to increased interest in alternative solutions, such as utilizing home equity.”

AAG offers a suite of home equity solutions, such as home equity conversion mortgages, traditional and proprietary mortgages, and real estate investment services. “We’re seeing more seniors using our products, like a reverse mortgage line of credit, to access their home equity and give their other retirement assets time to recover,” he added.

The survey was conducted in two phases, the first was issued on March 17 and the second on April 15. Participants’ sentiments reflected the stock market swings during that time.

In March, nearly 83% of participants were at least “slightly” concerned about their retirement portfolio due to the current market conditions. In April, that figure jumped to 87.5%, of which 39% were “very” or “extremely” concerned.

Also, most survey participants were concerned the current market crisis would affect their retirement lifestyle. Over 81% stated it as a concern in March. That number fell slightly to 79.5% in April

By April, over 43% of participants had less than $100,000 in their retirement portfolio, up from only 26% in March. Despite these changes, in April, 89% of participants were confident they had enough funds to ride out the downturn.

Up to 48.8% would “boost their emergency fund,” to improve their overall finances in retirement. In March, about 13% of those who have never had a reverse mortgage said they would consider one if it would allow their portfolio to recover, compared to 19.5% in April.

Homebot & Mortgage Coach integrate refi tools

Homebot and the Mortgage Coach Total Cost Analysis (TCA) platform are now completely integrated. This means that regardless of their size, lenders using the Homebot, Inc. personalized customer dashboard and the Mortgage Coach borrower education applications now can integrate both technologies into a streamlined loan refinancing solution.

The integration helps expedite decision-making for borrowers and lenders alike. It allows homeowners to use the Homebot refinance portal to explore various mortgage refinance options through the Mortgage Coach TCA. Loan officers can directly add into the system, detailed explanations of each refinance or purchase loan option tailored to the individual homeowner, and ultimately, keep borrowers engaged through loan selection and processing.  

Currently, thousands of banks and lenders use TCA, an enterprise-friendly platform that helps improve a mortgage borrower’s understanding of available loan options, according to the company website. Lenders can activate the new integration so their clients may proactively request a TCA from within Homebot, which instantly generates the TCA and notifies the loan officer. The integration makes it easy for lenders to identify and convert clients that are ready for a transaction.

The integration already provided approximately 200 unique TCA experiences, said Gemma Currier, SVP, Retail Sales Operations at Guild Mortgage. Since past customers are initiating the experience through Homebot, “we’ve been able to provide valuable advice, collaborate with customers instantly, and to select the best home loan option for their needs.” 

The Mortgage Coach technology serves as a borrower education tool for mortgage finance professionals and real estate agents, via clearly illustrated mortgage loan options, detailed financial reports, charts, video narration, or live updates, on any device. The TCA and video communication functions offer the personalized digital experience lenders need in today’s market, she said.

Homebot presents a complete and dynamic TCA presentation on my behalf using artificial intelligence “that already knows about each past client,” said Chad Baker, Regional Manager at CrossCountry Mortgage.

Homebot’s specialty is to enable loan officers and real estate agents to create personalized information dashboards for homeowners and homebuyers. The platform helps them make informed home financing decisions, and can help develop repeat business relationships. “Together, Homebot and Mortgage Coach are helping lenders streamline their refinancing strategy,” said Ernie Graham, Chief Executive Officer of Homebot.

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