“Grey divorce” – when a married couple over the age of 50 decides to separate – is a growing phenomenon. According to a study published in 2022 in the Journal of Gerontology, divorce rates have doubled among those 50 and older and tripled among those 65 and older since 1990.
For those deciding what married life will be like and how to separate previously intertwined finances, a gray divorce can bring about myriad financial issues. Housing is one such problem, but a new column published by Success magazine shows that reverse mortgages can play a supporting role.
Nancy Hetrick Founder and CEO Smarter divorce solutions and Divorce Financial Analyst discussed the availability of reverse mortgages for separated couples who meet loan eligibility criteria.
Hetrick told the media that the loans “are now fully regulated and insured and are no longer the fraud vehicles of the 1980s,” the column reads. The Home Equity Conversion Mortgage (HECM) program was created by legislation in 1988, and the first loans were issued under the program the following year.
“It’s really a wonderful flexibility and creativity for these couples,” she told the outlet, adding that partners leaving the marital home could use the equity they received to explore HECM to Purchase (H4P) loans. But staying at home later in life may also prove inappropriate given the natural limitations that come with aging.
“Maybe this is actually an opportunity for both of them to reimagine the last phase of their lives,” she said.
Earlier this year, American Financial (FOA) Vice President of Retirement Strategies Steve Resch told house lineAccording to Reverse Mortgage Daily (RMD), many of his colleagues in the financial planning field are increasingly dealing with gray divorce issues.
“Another opportunity is H4P,” Resch said in May. “Planners often don’t realize they can take advantage of this, and many of us are dealing with gray divorce scenarios right now. Another scenario where it really comes in handy is relocation.
“A lot of people move to Florida, and when one spouse dies, they move back to be closer to family,” he added. “So, I think there’s a huge opportunity there. Gray divorce, mortgage foreclosures and managing long-term care risk — those are really the biggest opportunities in my opinion. [for the reverse mortgage industry]”.
