Australian Broker forum is the place for positive industry interaction and welcomes your professional and informed opinion.

$3.5 billion reverse mortgage market a wasted opportunity

Notify me of new replies via email
Australian Broker | 17 Sep 2013, 08:00 AM Agree 0
The $3.5billion reverse mortgage market is slipping away as baby boomers settle into retirement, according to a major spokesgroup
  • Frank | 17 Sep 2013, 09:29 AM Agree 0
    Easy for James Hickey to do a study but piratically reverse mortgages are a compliance nightmare and frankly this is one market I will not touch. I see lawyers swimming around brokers in the future on this one.
  • Pass | 17 Sep 2013, 09:30 AM Agree 0
    I'm happy to pass on it. Too risky to write this type of lending in my opinion. The Broker will always be wrong under the new legislation, if anyone changes their minds etc years down the track etc.. Easier to just turn the business away.
  • JB | 17 Sep 2013, 10:00 AM Agree 0
    Done a few in the past & clients were all happy & grateful with their shiny new $ 45k reverse mortgages. However, when you look at the compliance, low loan sizes & paltry commission payable, hassle factor in managing them to approval, media negativity and uninformed comment from the legal fraternity, you'd come to the conclusion that it is not a viable business for a broker to be involved in.
  • SteveL | 17 Sep 2013, 10:20 AM Agree 0
    Having had parents who took out one in 2004, (One of the first one) at the time it was a god send to them. Enabling them to fix the house, and bring their lifestyle up to date etc. (They where VERY conservative with the money and old-school in their thinking so this was taken VERY seriously at the time). However over time it became a real worry to them to the point they started regretting the move. Being "Old-school" they accepted their responsibility in taking the loan out, but had regrets none the less. Only when the ppty was sold 7 years later did they receive piece of mind. I see this as a HUGE trap for people because regardless of how compliant you may be, regardless of how much independent legal and financial advice they receive, they will still grow old, their memories fade, they become more scared of the future and insecure. Add to this their families will see and fell their worry etc and also understand what they stand to lose as the interest adds up. From this Point of view there are so many better options for folks other than this. Wouldn't touch it with a barge pole.
  • Regional Broker | 17 Sep 2013, 10:41 AM Agree 0
    Pass on this , compliance risks everywhere and really it all works against the broker . Yes a market opportunity by one with a sting in its tail.
  • Broker | 17 Sep 2013, 11:02 AM Agree 0
    Same here, too much hassle , very little income , why bother?
  • Paul | 17 Sep 2013, 11:35 AM Agree 0
    Reverse mortgages are a specialised field, just like SMSF. Once you have developed the skill set, have an understanding of seniors and their needs, plus an understanding of age care, they are no different to any other lending product. If you read the direction of government in terms of meeting the cost of aged care, it is seen Equity Release is forming part of that policy, and we all have an understanding of the ageing population problems of the future.
  • Brenton Harris | 17 Sep 2013, 07:18 PM Agree 0
    They would be better off in many cases using a 'popi' ie both the client and broker
  • Paul | 18 Sep 2013, 07:19 AM Agree 0
    The comments above may have missed the point. By 2017, funding 5% of the consumer's cost of entering aged care will be a $630m per year market
  • Gary | 19 Sep 2013, 12:07 PM Agree 0
    Totally agree with all comments. I have never considered Reverse Mortgages as a worthwhile product. I also have a moral issue with the elderly entering into debt. Fraught with so many dangers I have turned several enquiries away.
  • overtheborderbroker | 23 Sep 2013, 11:15 AM Agree 0
    I have never written one as I morally disagree with the product.
  • Paul | 23 Sep 2013, 11:41 AM Agree 0
    Dear Overtheborderbroker.
    Having a better understanding of the retirees sector may help. You would probably would have seen retirement income is well below that of employment. In fact the majority of seniors only have the aged pension as income, yet they have expensive costs as trying to look after themselves and pay private health insurance (and not be a drag on the public system) and maintain their homes which would otherwise fall into disrepair.
Post a reply