Consumers shift to brokers for reverse mortgages

According to the latest reverse mortgage study by Deloitte and SEQUAL, approximately 52% of reverse mortgages written during the six month period to year end 2008 were sold through mortgage brokers and financial planners.

The figure, according to SEQUAL CEO Kevin Conlon, highlights an ongoing borrower preference towards intermediaries.

Mr Conlon said that since the market took off in around 2004 – after years of stagnant sales direct through banks and credit unions – third-party distribution had grown remarkably. In 2004 brokers and planners wrote just 17 per cent of reverse mortgages.

“These figures really reinforce a consumer preference to deal with someone who provides thorough advice, over an off-the-shelf option,” he said.

According to Deloitte and SEQUAL’s latest Reverse Mortgage Study, overall settlements of reverse mortgages were down by around 25% compared to the same period in 2007. However the overall size of the market grew by 8%. The total outstanding value of customers with a reverse mortgage facility is $2.5 billion, which equates to over 37,500 facilities outstanding.

James Hickey, Deloitte actuaries and consultants partner said the result was achieved in a “difficult year” and confirmed continued growth in the sector.