Proprietary reverse mortgages are outpacing HECMs. It’s time to raise the bar on fee transparency. 

Recently, a woman contacted me after her daughter encouraged her to get a second opinion before closing on a reverse mortgage. She had already chosen a lender, attended reverse mortgage counseling, completed her application and was ready to move forward. She simply wanted someone to review the numbers. When I opened the Loan Estimate, one figure immediately caught my attention. The origination fee exceeded $42,000. The loan was a proprietary reverse mortgage, not an FHA-insured Home Equity Conversion Mortgage (HECM). Unlike HECMs, proprietary reverse mortgages have no federally mandated cap on origination fees. The lender’s fee was legal. But legality and fairness are not always the same thing. The borrower ultimately closed on a loan with substantially lower fees, saving over $40,000, simply because she sought another opinion before signing. I’ve often wondered how many borrowers never make that second phone call. A growing market driven by consumer demand That experience has stayed with me because proprietary reverse mortgages are no longer a niche product. They have become one of the fastest-growing segments of our industry. According to New View Advisors, proprietary reverse mo...