Are Reverse Mortgages good or bad?

On February 5, 1988, President Reagan signed the Reverse Mortgage Bill into law and so as we approach HECM’s 30th Birthday we should ask, are Reverse mortgages good or bad?

I believe wholeheartedly in the goodness of Reverse Mortgages and I’ve staked my career on that belief by starting a mortgage company that specializes in the product. But my conviction is accompanied by two conditions.

  1. Reverse Mortgages have not always been a good thing and are just now truly becoming a product that serves people effectively.
  2. For Reverse Mortgages to be good, they must be used by the right people for the right reasons.

Brief History of Reverse Mortgages

  • 1961 – Nelson Haynes in Portland ME writes the first Reverse Mortgage for Nellie Young the Widow of his High School Football coach.
  • Mid-1980s – Congress begins exploring the viability of the Reverse Mortgage Program.
  • 1988 – President Ronald Reagan signs the FHA Reverse Mortgage Bill into Law.
  • 1990s – Begins a period of growth in popularity and abuse by lenders and borrowers.
  • Mid 2000s – HUD begins implementing regular changes to improve the program and expand its benefits to more people.
  • 2010 and beyond – Reverse Mortgages have become mainstream and prove to be an important part of retirement planning in the future.


The early years

Reverse Mortgages were originally intended to help those who had no other options. Like Widow Nellie Young in 1961, a Reverse Mortgage was the last resort to save someone from losing everything and give them the ability to use their home’s equity to stay in the home.

As the program started gaining steam in the 90?s and early 2000?s too many people began using the loan for the wrong reasons and without a definite plan for the future. Lenders also began taking advantage of seniors with excessive fees and marketing tricks. The mistakes of this era are why Reverse Mortgages continue to have a negative stigma today.


Around 2004 HUD began an evolution of the program to make it better for homeowners and their families. Features have been added that make a Reverse Mortgage good for people struggling to get by and also good for people who have plenty of money and assets and just see the value of a solid investment tool to help grow and protect their assets.

Today’s HECM Reverse Mortgage

Just like a child, the HECM Reverse Mortgage has grown up a lot over the last 30 years. It has moved beyond the troublesome teenage years and has entered the age of maturity to become a contributing member of society where it will help and bless the lives of millions of people.

The Future

Over the next 10-20 years we will see Reverse Mortgages become as common as any other retirement tool such as 401ks, Annuities, Pensions, etc. Some will continue to use the HECM as a last resort, but most will use it to enjoy greater financial freedom and will utilize the Line of Credit to secure their liquid assets and provide a high rate of return. When used properly the HECM Reverse Mortgage extends a person’s finances and allows them to live better, longer.

If It’s time for you or someone you love to better understand the benefits of a Reverse Mortgage, call me today to learn the Reverse Mortgage Facts.

Trevor Carlson

President – Reverse Mortgage Specialist

Heritage Reverse Mortgage


Heritage NMLS #1497455 Trevor?s NMLS #: 267962

1060 South Main Street Bldg. A Suite 101B

St George Utah 84770