Reverse Mortgages - US - January 2008

Table of Contents

• Scope and Themes
• What you need to know
• Scope of this report
• Abbreviations and terms
• Abbreviations
• Terms
• Executive Summary
• Industry snapshot
• Overview of the marketplace
• Securitization expected to have a positive impact
• Who is the typical HECM borrower?
• Mintel' s consumer survey sheds light on the population aged 62+
• What' s ahead
• Fast Forward Trends
• Trend: Home as Pension
• Should I Stay Or...
• Role of the Home: Memories in the Midst of Anxiety
• Trend: Trust in Me
• Trust and Reverse Mortgages
• Mechanisms of Trust
• Market Drivers
• The current environment
• FHA-backed reverse mortgages
• Demographic factors
• Population and housing growth
• An aging population
  • Figure 1: Age composition of the U.S. population, 1990-2020
  • Figure 2: Homeownership rates, by age of householder, 1990-2006
• An aging population spurns retirement for work
  • Figure 3: U.S. civilian labor force, age 55 and older, 1986-2016
• Recession and interest rates
  • Figure 4: Household financial obligations as a percent of disposable personal income (DPI), 2003-08
• Home prices decline after years of record-breaking appreciation
  • Figure 5: OFHEO house price index history, Q1 1990-Q3 2007
  • Figure 6: Four-quarter appreciation by census division, 3Q 2006-3Q 2007
  • Figure 7: Four quarter appreciation by state, 3Q 2006-3Q 2007
  • Figure 8: Bottom 20 statistical areas and divisions with lowest rates of house appreciation, percent change, period ending September 30, 2007
• Innovations in securitization
  • Figure 9: Amount of foreign holding of agency and government-sponsored enterprise (gse) backed securities, 1995-2006
• Regulatory environment
• Market Size and Trends
• Market size
• The emerging boom in reverse mortgages
  • Figure 10: HECM Applications, fiscal 2005 through projected fiscal (September 30) 2008
  • Figure 11: Active insured HECM loans, average unpaid balance, 1990-2008
  • Figure 12: Average expected interest rates of HECMs, 1990-2007
  • Figure 13: Average property value for HECMs, 1990-2008
  • Figure 14: Average maximum claim for HECMs, 1990-2008
  • Figure 15: Average principal limit of HECMs, 1990-2008
• Total mortgage originations
• Total home sales
  • Figure 16: New and existing home sales, by type, 2001-07
• Market Segmentation
• Demographic market segmentation -- by gender
  • Figure 17: Gender of HECM borrowers, fiscal year end September 31, 1990-2008
• Demographic market segmentation -- by age
  • Figure 18: Average HECM borrower age, fiscal year end September 31, 1990-2008
• Geographic market segmentation
  • Figure 19: Active HECM endorsements, by state and year, fiscal 2005-08
  • Figure 20: Active HECM endorsements by state, and % of U.S. market share, fiscal 2007
  • Figure 21: Active HECM endorsements, by state, and % of U.S. market share, total for fiscal 1990-2008
• Competitive Landscape
• Top lenders
  • Figure 22: Ranking and market share of top ten HECM lenders by number of loans, year end 2007
  • Figure 23: Top ten HECM lenders, Nov 2007 versus Dec 2007
  • Figure 24: Top 25 HECM Lenders, market share, year end 2007
• Home mortgage market consolidation
• Key reverse mortgage lenders: profiles
• Wells Fargo Home Mortgage, Inc.
• Financial Freedom Senior Funding
• Vertical Lend Inc. (World Alliance Financial)
• Countrywide Bank
• Bank of America (formerly Reverse Mortgage of America/Seattle Mortgage Company)
• Liberty Reverse Mortgage, Inc.
• Everbank Reverse Mortgage LLC (includes former BNY Mortgage Company)
• The agencies (GSEs)
• Ginnie Mae
• Fannie Mae
• Freddie Mac
• Advertising and Promotion
• Television
• Print ads
  • Figure 25: BoA print ad for "senior equity reverse mortgage ", 2007
  • Figure 26: American guarantee and trust reverse mortgage seminar print ad, 2007
  • Figure 27: Countrywide reverse mortgage print ad, 2007
  • Figure 28: Wells Fargo reverse mortgage print ad, 2007Figure 29: Financial freedom print ad, 2007
• Direct mail
  • Figure 30: Wells Fargo reverse mortgage direct mail ad, 2007
  • Figure 31: Wells Fargo reverse mortgage direct mail ad for "free" seminar, 2007
  • Figure 32: Financial Freedom reverse mortgage direct mail ad
• The Consumer
• Introduction
• Who owns their home?
  • Figure 33: Homeownership, by gender and age, November 2007
  • Figure 34: Homeownership, by income, November 2007
  • Figure 35: Homeownership, by marital status, November 2007
  • Figure 36: Homeownership, by number in household, November 2007
  • Figure 37: Homeownership, by level of educational attainment, November 2007
• Who has mortgage debt and how large is this debt?
  • Figure 38: Amount of mortgage debt, by gender, November 2007
  • Figure 39: Amount of mortgage debt, by age, November 2007
  • Figure 40: Amount of mortgage debt, by income, November 2007
  • Figure 41: Amount of mortgage debt, by marital status, November 2007
  • Figure 42: Amount of mortgage debt, by number in household, November 2007
• Who has credit card debt and how large is this debt?
  • Figure 43: Amount of credit card debt, by gender, November 2007
  • Figure 44: Amount of credit card debt, by age, November 2007
  • Figure 45: Amount of credit card debt, by income, November 2007
• Who has educational loans and how large is this debt?
  • Figure 46: Amount of educational loan, by age, November 2007
  • Figure 47: Amount of educational loan, by income, November 2007
• Who has HELOCs and how large is this debt?
  • Figure 48: Amount of HELOC debt, by age, November 2007
  • Figure 49: Amount of HELOC debt, by income, November 2007
• Consumer intentions to bequeath homes to heirs
  • Figure 50: Intend to leave home to heir, by income, November 2007
• Who has reverse mortgages?
  • Figure 51: Reverse mortgage ownership, by income, November 2007
  • Figure 52: Familiarity with reverse mortgage product, by gender, November 2007
  • Figure 53: Would consider obtaining a reverse mortgage in the future, November 2007
  • Figure 54: Would consider obtaining a reverse mortgage in the future, November 2007
  • Figure 55: Would consider obtaining a reverse mortgage in the future, November 2007
  • Figure 56: Would consider obtaining a reverse mortgage in the future, November 2007
• Consumer intentions to move in order to pay off mortgage debt
  • Figure 57: Plan to move in order to pay off mortgage debt, November 2007
• Future and Forecast
• Future trends
• Homeownership rates will continue to rise
  • Figure 58: Homeownership rates, projected increase in numbers of homeowners, by race/ethnicity, 2000 and 2010
• Homeownership by age
  • Figure 59: Households, by age of householder: 2001 to 2006 (U.S. census estimates) and 2007 to 2017 (Mintel forecast)
• As Baby Boomers retire
• The continuing reverse mortgage boom
• Technology
• Market forecast
• Appendix: Trade Associations