“Reversing” the Downward Trend

While the volume of forward mortgage appraisals has declined, the volume of reverse mortgage appraisal keeps increasing. In the past three years the number of lenders offering reverse mortgage loans has increased over 150%. In fact, in 2000 there were 6,640 FHA reverse mortgages done nationwide - this year the number of FHA reverse mortgage loans has increased to 107,558. That's an amazing 1,619% in 7 years! To put it mildly, this market is on fire.

As the demographics of America shifts from "Baby Boomers" to senior citizens the demand for reverse mortgages will only continue to increase. According to Fannie Mae, currently 20 million+ people are older than 65. Of these, 77 percent are homeowners and 84 percent own their home free and clear. When I realized the trend, I started to move my appraisal business into the reverse mortgage industry. That was in the mid-1990's, and I have enjoyed every minute.

The appraising part is pretty much the same as a forward mortgage. Most are FHA assignments since they started it all with the HECM (Home Equity Conversion Mortgage). The main difference lies in the clients - specifically the homeowners. I treat each one the way I would want my parents or grandparents treated. During a one hour inspection, I spend about 10 minutes inspecting the home and the remainder of the time visiting with the customer. I have met some fascinating people from a Medal of Honor recipient to one of the first pilots to fly a China Clipper from San Francisco to Hawaii. Senior citizens are a vocal group. If the customer is happy, your client will be happy. A happy client means more orders.

A short time ago, one of my best clients told me they were having trouble actually finding appraisers to complete reverse mortgage appraisal assignments, so they started exploring the possibility of using an appraisal management company. Since I didn't want to see my fees cut at the same time appraisal costs raised for the elderly, I decided to fight back. After all, AMC's cannot exist without willing appraisers - and I am not willing. So, over the course of the last year, I created www.ReverseMortgageAppraisers.com to manage the lenders "Approved Appraiser Lists" and help the lenders locate appraisers nationwide. My goal is to sign-up enough quality appraisers in each county to give the lenders full coverage. Once a county is covered adequately, I'll stop accepting memberships there.

As my grandfather would say "the best time to plant a tree is yesterday, the next best time to plant a tree is today". And it's definitely not too late for you to get into the reverse mortgage industry.

Len Fishman, Appraiser