Lenders missing from reverse mortgages
By
Adam Smith
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9/08/2011 4:00:00 AM
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1
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The list of reverse mortgage providers is shrinking as the number of people needing to utilise equity release programs is growing, an industry body has stated.
SEQUAL chairman and managing director of Australian Seniors Finance John Thomas has stated that the reverse mortgage market has seen an exodus of participants. He commented that a difficult funding environment had seen many lenders withdraw.
“A lot of providers are suffering from a lack of funding. We have about nine members in SEQUAL. If you go back three, four, five years ago we probably had something like 25 members. Some have withdrawn, and some have closed their books to new business. Funding at the moment probably prohibits a lot of people from entering the market,” Thomas commented.
While the lenders may have exited the market, Thomas stated that demand for the products remains strong. As Australia’s population ages, Thomas indicated, equity release programs could become increasingly important.
“There are lots of seniors out there who, given the right considerations, want to look after themselves and want to fund themselves, so the demand for equity release is there.”
Thomas' statements come on the back of the government's release of draft legislation for phase two of NCCP, which details reverse mortgage regulations. Thomas said the proposed legislation largely mirrors the SEQUAL code of conduct.
Related stories:
SEQUAL standards to become law
Reverse mortgage market hits $3bn
ASIC to focus on advice to the aged
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Judy West on
09 Aug 2011 04:03 PM
If it goes through, the government's proposed Aged Care Package will supply all reverse mortgages in Australia won't they?