Key facts
- Mutual of Omaha Mortgage's SecureEquity proprietary reverse mortgage is now available in 41 states and Washington D.C.
- The minimum home value for SecureEquity has been lowered to $300,000.
- The product is available to borrowers as young as 55, with exceptions in five states.
- Unlike HECM, SecureEquity can directly pay off consumer debts like credit cards and auto loans.
- Mutual of Omaha ranked No. 2 for HECM endorsements in the first nine months of the year.
Proprietary reverse mortgages are gaining traction among senior homeowners as an alternative to the federally-backed Home Equity Conversion Mortgage (HECM) program, particularly as rising interest rates impact HECM loan availability. Mutual of Omaha Mortgage has been a leading proponent, expanding its SecureEquity product to 41 states and Washington D.C. and recently lowering the minimum home value requirement to $300,000.
During a recent webinar, company leaders highlighted how SecureEquity serves senior homeowners in ways HECM cannot. Mark O’Neil, Mutual of Omaha’s senior vice president of wholesale, noted that the increase in the 10-year Treasury yield has led to fewer proceeds and less availability for HECM loans. He stated that the timing of the product changes, including the lower home value threshold, was opportune given market conditions.
SecureEquity is available to borrowers as young as 55, a key differentiator from HECM's minimum age of 62. A significant advantage is its ability to directly pay off various consumer debts, such as credit cards, auto loans, and student loans, which HECM does not permit at closing. The product also offers an adjustable-rate mortgage (ARM) option with a 1.5% line-of-credit growth rate for the first seven years on unused principal, though it requires an initial withdrawal of 25% of the principal limit. Notably, SecureEquity does not have a mortgage insurance requirement, unlike HECM's upfront premium.
Pete Kulis, a wholesale account executive, shared case studies illustrating the product's benefits. One involved a 75-year-old couple with a $300,000 home and a $100,000 mortgage balance. A HECM would have left them short for closing, but SecureEquity allowed them to pay off their existing mortgage and retain funds for emergencies. Another example featured a 68-year-old retiree looking to purchase a $1.5 million home; SecureEquity reduced the required down payment compared to a HECM for Purchase option. A third case involved an 83-year-old widow who used SecureEquity to pay off her existing lien and fund property taxes, leaving her with surplus funds, whereas a comparable HECM would have fallen short. Finally, a 78-year-old client with a non-warrantable condominium, ineligible for HECM, used SecureEquity to consolidate debt and secure a buffer.