According to HousingWire, credit unions are largely staying away from reverse mortgages despite having a significant portion of their membership that could benefit from the product. Ron Kamler, who leads Alliance Reverse Mortgage and has spent nearly two decades working with credit unions, points out that credit unions originated fewer than 100 reverse mortgages out of nearly 36,000 closed nationwide over a recent 12-month period. He sees this gap as a missed opportunity for credit union members who might otherwise turn to banks or other lenders for help.
Kamler believes the hesitation comes down to two main concerns. First, there's anxiety about reputational risk, though he argues that when done properly, reverse mortgages no longer carry the stigma they once did decades ago. Second, the product itself is complex and requires specialized expertise that most credit unions don't have in-house. Rather than seeing this as a reason to avoid the product entirely, Kamler suggests the real reputational risk for credit unions is actually turning away members who need the service, sending them elsewhere to find solutions.
His solution is a partnership model where credit unions work with reverse mortgage specialists like his company. When a credit union member inquires about a reverse mortgage, instead of being turned away, they get connected to a trusted partner who understands the product thoroughly. Kamler uses his own partnership with Redwood Credit Union as an example, where they offer what he calls a turnkey arrangement. The credit union doesn't have to build systems or train staff from scratch; Alliance Reverse Mortgage handles the infrastructure, website integration, and member service.
Beyond just making the product available, Kamler is noticing a shift in how reverse mortgages fit into retirement planning. Rather than being viewed as a desperate last resort, financial advisers are increasingly incorporating reverse mortgages into comprehensive retirement strategies early on. He shares the example of a couple whose adviser recommended they take out a reverse mortgage in their sixties not to use immediately, but to establish a growing credit line that could provide flexibility years down the road when they actually needed it.
What I am seeing locally here in the Bay Area and throughout the East Bay is that many of our older homeowners are sitting on considerable equity but don't fully understand all the options available to them. If our local credit unions could partner with specialists to offer reverse mortgage guidance, it would keep more people within the credit union family while giving them access to legitimate financial tools that might help them retire when they want to, rather than when they feel forced to.
