Given all the publicity which reverse mortgages receive it may be interesting to measure their popularity.

According to the National Reverse Mortgage Lenders Association:

“Reverse mortgages have been around in one form or another since the early 1960s. The product remained in relative obscurity until 1990 when the U.S. Department of Housing and Urban Development unveiled the federally-insured Home Equity Conversion Mortgage (HECM). The sector got another boost six years later when Fannie Mae launched its own reverse mortgage product, the Home Keeper.

“HECM production accounts for 90-plus percent of the total market. To date, more than 200,000 HECMs have been originated in the U.S., including more than 76,000 in fiscal year 2006 and 43,000 in FY 2005.”

If HUD is the source of some 90 percent of all reverse mortgages and HUD authorized 76,000 loans in fiscal 2006 (with the government, the year begins October 1st for accounting purposes), that means we’re talking about roughly 84,444 mortgages in 2006

In comparison, the Nation has more than 300,000,000 people. Of that number, says the Census Bureau, more than 36 million are age 65 or older.

As to mortgages in general, the Federal Reserve reports that some 26 million federally-regulated loans were issued in 2005, the latest year for which we have figures. In addition, loans from other sources added about 5.2 million to the total. In all, about 31 million home loans were issued in 2005.

What does this stuff tell us? The potential market for reverse mortgages is vastly larger than what we have today — if lenders can provide products which borrowers will see as desirable.

This entry was posted on Friday, June 8th, 2007 at 8:17 am and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.