Proprietary reverse mortgages are outpacing HECMs. It’s time to raise the bar on fee transparency.
Proprietary reverse mortgages surpassed HECMs in Q1 2026, with $953 million in originations vs $875 million. With no federal cap on origination fees, the industry faces growing pressure to improve fee benchmarks and disclosure.
The shift towards proprietary reverse mortgages is a significant development in the mortgage industry, and it has implications for infrastructure and the broader real estate market. As seniors increasingly turn to proprietary reverse mortgages, which are not insured by the Federal Housing Administration, there's a growing concern about the lack of transparency in fees associated with these products.
The fact that proprietary reverse mortgages have surpassed Home Equity Conversion Mortgages (HECMs) in originations is notable, and it highlights the need for greater scrutiny of the industry's fee practices. Without a federal cap on origination fees, proprietary lenders are free to charge what they want, which can lead to confusion and mistrust among consumers. As the industry continues to grow, it's essential that lenders prioritize fee transparency to avoid regulatory scrutiny and reputational damage.
Looking ahead, industry stakeholders should watch for developments on fee disclosure and benchmarks. The National Reverse Mortgage Lenders Association and other industry groups may play a role in establishing best practices for fee transparency. Additionally, regulators may take a closer look at the proprietary reverse mortgage market to ensure that consumers are protected. As infrastructure and real estate investors, it's essential to stay informed about these trends and developments, as they can have a ripple effect on the broader market.
Originally reported by housingwire.com. InfrastructureNews adds analysis for real estate & property readers.