“It’s a very, very, very big market,” he said. “In fact, it’s a bigger market than the overall traditional market as a whole.”
The distribution gap between reverse and conventional is part of what he’s hoping to address, Peskin said. Reverse mortgages are offered by approximately 2% of originators while HELOCs are offered by the other 98%, and building the product as a HELOC is an attempt to reach the broader originator base.
“Reverse mortgages are also offered by a very small subset of the overall market,” Peskin said. “We wanted to build a chassis that would give access to the bigger, broader market with a program that is what people are used to.”
Rising costs are adding urgency to the equity access problem, he said. HOA fees, homeowners insurance, real estate taxes, and everyday expenses are all moving higher, squeezing fixed-income homeowners who have wealth on paper but limited monthly cash flow.
“Why not tap into the largest asset you have in a comfortable way?” he said. “Just because it’s illiquid doesn’t mean you can’t have a creative way to tap into it that gives you control. And it’s a lot better than going out and ringing up $50,000 in credit card debt at 20%.”
