HighTechLending Markets HELOC as Reverse Mortgage Alternative

HighTechLending is actively marketing its EquitySelect home equity line of credit (HELOC) to homeowners aged 55 and older, presenting it as an alternative to traditional reverse mortgages. This strategic shift comes amid a significant, long-term decline in the volume of federally insured reverse mortgage endorsements.

During a recent webinar titled “Beyond Reverse — Winning the 55+ Borrower,” Paul Fiore, vice president of sales at HighTechLending, highlighted that annual Home Equity Conversion Mortgage (HECM) endorsements have dropped approximately 78% from their 2009 peak, now averaging between 25,000 and 30,000 loans annually. Fiore contrasted this with the broader market, stating, “The 55-plus community is doing HELOCs and cash-outs, about a million loans a year.” He argued that focusing solely on reverse mortgages means missing a substantial portion of potential borrowers.

Data from Reverse Market Insight (RMI) supports Fiore's observations, showing that the top 100 HECM retail lenders recorded 2,064 loans in June, a 6% increase from May but a 9.8% decrease year-to-date. Furthermore, HECM Mortgage-Backed Securities (HMBS) issuance fell to $456 million in June, marking one of the lowest months for HMBS issuance since the program's inception in 2009, according to New View Advisors.

Fiore attributed the decline in reverse mortgage adoption to several factors, including higher interest rates, increased closing costs, and persistent negative perceptions among older borrowers. He noted that many individuals who initially inquire about reverse mortgages ultimately opt for different financial products. HighTechLending's EquitySelect is structured as a HELOC and can be established in either a first- or second-lien position, with line-of-credit amounts potentially reaching up to $4 million in first position and $1 million in second position.