New
construction

The
reverse
mortgage
industry
has,
for
a
while,
aimed
to
communicate

the
potential
benefits
of
the
Home
Equity
Conversion
Mortgage
(HECM)
for
Purchase
program
as
a
mechanism
for
securing
a
new
home
by
using
a
reverse
mortgage.
But
one
impact
that
Cook
has
observed
in
his
own
business
—
at
least
anecdotally
—
is
an
apparent
mistrust
that
older
buyers
have
for
new

construction.

“They
have
quality
concerns,
specifically
with
how
they’re
built
today,”
he
said.
“Some
feel
like
homes
aren’t
built
like
they
used
to
be.
So,
even
as
you’re
thinking
about

housing
inventory,
I
can’t
imagine
a
large
number
of
baby
boomers
are
building.
I
think
they’re
more
or
less
sitting
on
what
they
have,
or
buying
that
20-
to
30-year-old
home.”

Such
quality
concerns
could
be
keeping
some

baby
boomer
clients
from
moving
into
newly
constructed
homes,
Cook
said.
But

interest
rates
are
another
element
that
is
enticing
baby
boomers
to
remain
where
they
are
—
particularly
the
homeowners
who
refinanced
during
a
period
of
historically
low
rates
who
are
then
discouraged
from
taking
a
new,
elevated
rate.

Inspection
requirements

Cook
explained
that
his
company
is
seeing
a
“big
trend”
in
mortgage
and
title
companies
that
require
a
home
inspection
as
part
of
the
transaction
process,
which
he
said
could
also
apply
to
the
reverse
mortgage
side.

“[It’s
being
done]
just
to
verify
the
status
of
the
home
prior
to
releasing
those
funds,”
he
said.
“For
us,
whether
they’re

aging
in
place,
buying
new
construction
or
just
buying
a
residential
property,
there’s
an
opportunity
that
we’re
seeing,
and
it
is
growing
from
the
inspection
industry’s
perspective.”

A
home
health
checkup,
or
an
instance
related
to
a

home
equity
line
of
credit
or
a
reverse
mortgage,
could
see
an
insurance
company
require
an
inspection
with
a
plan
for
new
coverage,
which
tends
to
be
important
for
people
in
the
inspection
field.

When
asked
about
the
intersection
between

appraisals
and
inspections
—
particularly
as
it
relates
to
a

Federal
Housing
Administration
(FHA)
requirement
that
sometimes
requires
a

second
appraisal
on
a
reverse
mortgage
—
Cook
conceded
some
similarities
while
also
acknowledging
that
inspectors
are
generally
more
expensive
than
appraisers.

Forging
connections

When
asked
if
he
saw
a
need
for
people
in
the
inspection
business
to
forge
connections
with
reverse
mortgage
originators,
Cook
did
not
hesitate
to
answer
affirmatively.

“We
tell
all
of
our
franchise
owners
not
to
forget
about
banks,
lenders
and
loan
originators,”
he
said.

Cook
also
feels
like
reverse
mortgage
professionals
are
potentially
great
partners
for
home
inspection
businesses.

“Anybody
buying
a
home,
anybody
getting
a
reverse
mortgage
or
anybody
getting
a
new
insurance
policy
should
really
do
their
best
to
understand
what
they
own,
or
the
status
of
their
home
—
especially
before
they
take
out
more
money,
or
before
they
get
an
insurance
policy
that
may
not
cover
a
home’s
full
value,”
he
said.

But
home
inspectors
also
have
reputations
as
“alarmists,”
Cook
said.
This
is
because
“they’re
literally
trained
in
school
to
find
the
biggest
problems
and
identify
them.
If
that
client
is
not
planning
to
move
or
plans
to
age
in
place,
that’s
a
deeply
personal
thing.”

If
engaging
with
a
home
inspector
for
a
reverse
mortgage
client,
finding
an
inspector
who
has
a
good
“bedside
manner,”
so
to
speak,
can
be
key
to
a
successful
relationship
and
transaction,
Cook
said.

“Home
inspections
are
a
great
thing,
and
everybody
should
recommend
them
because
everybody
should
understand
the
status
of
the
biggest
asset
that
they
own
at
all
times,”
he
said.
“But
make
sure
that
you’re
partnering
with
a
home
inspector
who’s
not
going
to
scare
your
client,
since
that
wouldn’t
be
good
for
the
mortgage
industry
or
the
client’s
psyche.”