Reverse Mortgage Originators See Opportunity with Single Female Borrowers
The real estate market is seeing more activity from older, single – especially divorced – women, and the reverse mortgage industry is no different.
Not only is the number of baby boomer marriages ending in divorce growing faster than other groups, but widows continue to outnumber widowers.
Howard Frankel, senior reverse mortgage loan officer with Resolute Bank in Naples, Fla., has definitely noticed more single women in his Home Equity Conversion Mortgage client base.
“There is no doubt there is a heavy weighting toward single women doing HECMs,” Frankel said. “Especially women who are older, who might be in their upper 70s and who have lost a husband recently.”
Most of these women are divorcees and widows new to Florida, migrating from northern states and following friends who already live in the Sunshine State, Frankel said. Many times, they use a HECM for Purchase out of financial necessity.
“Overall, widowed single women who may or may not be in good financial ways are looking at HECMs as a way to buy a property they want to live in,” Frankel said.
Melinda Hipp, branch manager with Open Mortgage, LLC in San Antonio, Texas, said she has originated 22 reverse mortgages for single women in the last two years and none for single men. The 22 loans were for a mixture of divorced and widowed women.
Recently, she has seen more of these clients come to her from financial professionals or others familiar with the loans.
“I do know that I have seen more widowed women lately who are referred by their CPA, financial planner, Realtor, or attorney,” Hipp said.
Ellen Skaggs, the reverse national sales manager with New American Funding in Tustin, Calif., said she is also seeing more women inquiring about and eventually taking out reverse mortgages. She estimates that, of the divorced borrowers she works with, about 60% are women. Of single widows and widowers, about 75% are widows; Skaggs said the latest data she heard was that widows generally outnumber widowers by about five to one.
About 90% of her single female inquiries qualify for a reverse mortgage, Skaggs added.
“A lot of them are just not prepared to keep up payments with one income,” Skaggs said.
Earlier this year, a team of researchers noted that while divorce generally places people at a higher risk of retirement troubles, women have a built-in advantage with higher rates of homeownership — something that helps soften the blow of losing a partner’s income and retirement benefits.
“The explanation appears to be that divorce leaves single women with two offsetting things — children, who are costly to raise, and the house, which provides a means for accumulating home equity,” the team from the Center for Retirement Research at Boston College concluded.
As for states in the north of the U.S., originators do not seem to be noticing more inquiries from single women.
“I personally have not had…an inordinate amount of single females looking to buy a house,” John Leer, a CRMP at KleinBank in Minnesota, said.
Laurie MacNaughton, a reverse mortgage specialist with Atlantic Coast Mortgage, LLC in the Washington D.C. area, also said she has not noticed a “big shift” toward more single women looking at HECMs.
Frankel credits better press, as well as more product recognition and understanding for the rise in the HECM volume with the single, female consumer group.
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