Texas is the second-largest reverse mortgage lending state.
AUSTIN, Texas (November 19, 2012) – Last week, the 50,000th reverse mortgage was issued in Texas since the product first became available to Texans twelve years ago. Texas now has a national market share of 8.8% of all reverse mortgages in the country, making the Lone Star State the second-largest market for this retirement product.
Prior to the origination of the first Texas reverse mortgage in the year 2000, Texas was the only state in the country without this important financial option for its senior homeowners. Since then, over $4 billion worth of home equity has been borrowed by homeowners in Texas.
“This is a great occurrence for senior homeowners in Texas,” said Scott Norman, VP of Sente Mortgage’s Reverse Mortgage Division and a member of the National Reverse Mortgage Lenders Association Board of Directors. “Over the next decade, as more Texans are forced to deal with stock market fluctuations, tax increases and expanding health care costs, reverse mortgages will continue to take on a greater significance as a financial planning tool,” said Norman.
Texas has uniquely protective homestead laws and strict compliance standards embedded in its constitution, including mandatory third-party counseling for prospective reverse mortgage borrowers. Because of this, reverse mortgages in the Lone Star State are considered to be one of the most regulated mortgage loans in the entire country. According to the Texas Department of Savings and Mortgage Lending, the state’s chief mortgage regulator, its office has not issued a single enforcement action over the last six years, based on complaints involving reverse mortgages.
In the last two years, $1.07 billion in reverse mortgage funds have been accessed by Texas homeowners. Texas may be poised to become the largest reverse mortgage lending state in the country by the end of the decade. Individuals age 65 or older own 1,307,210 owner-occupied homes in Texas, representing 22.9% of all households in the state. In addition, Texas is home to 5.2 million baby boomers that will be at least 65 years of age by 2030. And out of the estimated 39 million informal caregivers throughout the United States, nearly 3 million are in Texas.
“The strong growth we’re seeing in Texas reinforces our belief that reverse mortgages remain a safe, cost effective and critical retirement option for senior homeowners as they evaluate their financial plans,” added Norman.
Texas reverse mortgages are a type of home equity loan authorized by the Texas Constitution that allows senior homeowners, age 62 or older, to borrow against the equity in their homes without having to repay any of the mortgage debt during their lifetimes so long as they continue to live and properly maintain their homes, keep the property tax and insurance payments current and abide by the terms of the reverse mortgage loan agreements. All Texas law establishing and regulating the reverse mortgage is contained in provisions of Section 50, Article XVI, of the Texas Constitution, including specifically subsections 50(a)(7), which authorizes the reverse mortgage, 50(k) through 50(p), inclusive, and Section 50(v), which define the loan.
About Sente Mortgage
Sente Mortgage is a Texas owned and operated mortgage bank, offering the widest variety of residential loan programs including conventional, reverse, FHA, VA, USDA, and jumbo. Their mortgage bankers, processors and underwriters all work together within the same organization making for an efficient, well-managed loan process. Sente Mortgage has offices in Austin, Dallas/Fort Worth, Houston, New Braunfels, and San Antonio.
This past September, Inc. magazine ranked Sente Mortgage No. 1437 on its sixth annual Inc. 500|5000, their exclusive ranking of the nation’s fastest-growing private companies. In the past two years, both the Austin and San Antonio Business Journals have honored Sente Mortgage as one of the best places to work. Sente Mortgage was also recognized in 2011 and 2012 as one of the fastest growing private companies in Central Texas by the Austin Business Journal’s Fast 50 award in the more than $10 Million category.
Sente Mortgage NMLS ID #132111.