HECM 101 for Advisors
The Federal Housing Administration introduced its reverse mortgage program, named Home Equity Conversion Mortgage, or HECM nearly 30 years ago. Numerous changes have been made to the program, particularly in the last 10 years. These changes have focused on making the program more protective to consumers and sustainable by HUD, as well as a purchase money option. HECM adoption by financial advisers has come slowly. Even with the introduction of the HECM Saver in 2010, named so for its reduced closing costs, adoption by advisers remained modest. But during this time research was being conducted by various financial and legal professionals into the application of reverse mortgage as a financial planning tool; their findings being published in the Journal of Financial Planning as early as 2012. In this presentation we will review the HECM program and strategies for improving outcomes.