A post yesterday by Reverse Mortgage Daily writer Elizabeth Ecker focused largely on my testimony before Congress a couple weeks ago about whether the reverse mortgage market could exist without insurance provided by the Federal Housing Administration. She writes, in relevant part:
Take the stress off of FHA and make way for private reverse mortgage products, was the message presented by two housing academics [the other being Anthony Saunders] in testimony presented before a Congressional panel earlier this month. The progression might not be such a long way off, they said....
“Conventional reverse mortgages will likely increase in market share as the economy recovers, housing prices stabilize, and credit conditions improve,” Houman Shadab, Associate Professor of Law at New York Law School told the panel.
“Currently, the most important obstacles to the development of private reverse mortgages seem to be continued uncertainties regarding housing prices and the willingness of lenders, insurers, and investors to assume housing price risk.”
The outlook is strong, he said. And insurers could become larger players as they are already equipped in actuarial-based products. It was rumored this year, for example, that New York Life was seeking entry into the reverse mortgage business, in addition to active insurers in the space such as Genworth Financial and, previously, MetLife.
“There now seems to be a market consensus developing around how to better underwrite and produce what could become a standardized privately insured reverse mortgage. For example, an underwriter of life insurance and similar products has recently argued that the reverse mortgage market could greatly expand if actuarial methods used in other industries were applied to reverse mortgages.”
Read the whole post here.