Reverse mortgages moved from last-resort cash to a retirement lever

Home equity moved from a dormant asset to an active retirement lever, not a last-resort cash line. Consumers recalibrated their thinking about reverse mortgages, and originators watched the shift because it changed who qualified as a viable client. 

“I think people are looking at their home equity as they get closer to retiring, and they're wondering how they can use that money during retirement, especially since it's the largest asset for a lot of people,” Ben Sillitoe, president of Retire Right Mortgage, told Mortgage Professional America. “A lot of consumers are starting to see reverse mortgages for exactly what they are. They're just another financial tool that might be useful to them during retirement. And for originators, this shift in perception means that there are a lot more potential reverse mortgage clients out there." 

Research reframed risk in retirement planning 

Legitimacy was fueled by a decade-plus of analysis in retirement research circles.

"There have been a lot of improvements to the product over the years, but I believe the main development that has been the emergence of research in the past 10 to 15 years, which has shown the reverse mortgage to be very effective at mitigating one of the main risks during retirement, which is running out of money during a potentially long retirement,” Sillitoe said. “And research has shown the HECM to be pretty effective at reducing that risk when it's used appropriately. So, the financial planning industry is starting to notice that, especially with the unprecedented amount of home equity. that people have accumulated over the last several years." 

This was not a universal embrace; it was a targeted response to sequence and longevity risks that defined retirement outcomes for many households. The evidence base put structure around when and how to use home equity alongside investment portfolios, and that framing resonated within planning circles. 

Borrower profile widened beyond cash-strapped retirees 

With costs rising and longer horizons at play, the borrower's profile widened.

“The new borrower profile is pretty much anyone in the right age range with enough equity to qualify for the HECM,” he said. That included households that were not strained monthly cash flow but wanted a buffer against market shocks. “Even if your client might not be worried about running out of money during retirement, it could still be used to preserve their net worth in retirement." 

The coordination mechanism was straightforward when paired with invested assets during the drawdown.

“It can be used to mitigate the sequence of returns risk in retirement,” he said. “So it allows people to let their asset value recover with their traditional retirement funds and withdraw from the reverse mortgage during those periods instead. And research has shown that they're much more likely to have a larger net worth at the end of a 20 or 30 year period if they use that strategy appropriately." 

For originators, expansion reshaped pipeline thinking. Prospects were not limited to clients in distress; they included equity-rich retirees and near-retirees who prioritized portfolio durability over short-term liquidity, and who weighed housing decisions as part of total net worth management. 

Stigma, scale and product adoption still dragged 

Adoption inside lending shops still faced friction.

“A lot of originators have the same negative misperceptions that consumers have and so that prevents them from even looking into it for their clients,” he said. “That stigma also prevents a lot of banks and lenders from offering the product."

He believed that economics compounded perception risk, saying, "It's a relatively small market and so the limited size prevents a lot of companies from making the investment needed to offer the product even if maybe they're not as concerned about the stigma So these things kind of work together to keep it a niche product."

For B2B leaders evaluating entry, that meant training, compliance, and secondary execution needed to clear a higher bar to justify the lift, while field teams needed sharper education to counter outdated narratives. The market dynamics showed up in local demand patterns as well.

“Las Vegas has grown tremendously over the past several decades,” he said. The structural draw remained intact. “We've had no state income tax and traditionally lower cost of living, so it's been an attractive place for people to come,” he said. Affordability, though, had shifted with home appreciation. “our property values have gone up a lot. right and so it's kind of edged people out of affordability when they go to move here."