Reverse Mortgages

The History of Reverse Mortgages

The Reverse Mortgage loan product was created in 1961 when Nelson Haynes of Deering Savings & Loan wrote the first reverse mortgage to Nellie Young in Portland, Maine. Haynes designed the reverse mortgage to help Nellie stay in her home after the loss of her husband.  Over the course of the next couple decades, reverse mortgages slowly began to grow in popularity.  During a Congressional hearing in 1969, a UCLA professor named, Yung Ping Chen expressed his personal support for the concept of an “actuarial mortgage plan in the form of a housing annuity”.  While the reverse mortgage was in it’s infancy stages, it did not bolster the same types of protection that reverse mortgages and it’s mortgagees have today.

It wasn’t until the first congressional hearing concerning reverse mortgages in 1983 that Pennsylvania State Senator, John Heinz proposed to have reverse mortgages be insured by the Federal Housing Administration (FHA).  It was at this time that the home equity conversion concept was further detailed and explored.  Now that reverse mortgages were garnering national and political attention, it really started to take form and develop into what a reverse mortgage is today.

By 1987 Congress passed the FHA Insurance Bill called the Home Equity Conversion Mortgage Demonstration.  On February 5th 1988 President Regan signed the FHA Reverse Mortgage bill into law.  This allowed HUD the authority to insure reverse mortgages through the Federal Housing Administration (FHA).  The following year, 1989 James B. Nutter Company of Kansas City Missouri wrote the first FHA insured Home Equity Conversion Mortgage (HECM) to Marjorie Mason of Fairway, Kansas.

The FHA insured reverse mortgage has continued to grow and evolve over the past 25  years helping seniors live better lives and plan for all of life’s emergencies and necessities.  Some of the most notable improvements made include the establishment of uniform HECM counseling practices by HUD and AARP in 2001, the Guidelines for Financial Assessment finalized in 2014 and the HECM lending limit increase signed into law by President Obama in 2016, signaling a strengthening economy and raising home values.

Advantages of Reverse Mortgages

  • Unlocks equity and provides access to cash for homeowners
  • Eliminates monthly mortgage payments
  • Extends the life of other retirement savings
  • You can leave your home to your heirs
  • You still own you home
  • Insured by the Federal Government

How can I use a Reverse Mortgage?

Reverse mortgages can be used to refinance a forward mortgage, refinance an existing HECM, or to purchase a new home.  Unlock your home’s equity today and turn it into a structured monthly payment, a lump sum payment or a combination of both.

Reverse Mortgage Eligibility Requirements

Types of Reverse Mortgages

HECM Examples

Work with a Local Reverse Mortgage Lender

Innovative Mortgage Services specializes in reverse mortgages in Port St. Lucie, Stuart, Vero Beach and the whole state of Florida. We custom tailor your reverse mortgage loan to suit your specific financial needs and goals. With more than 13 years in business, we know how to serve your needs in a professional and timely manner.  We make mortgages easy and do all the work so you don’t have too.  Call us today at (386) 717-0253 or click here for a FREE consultation!