Proprietary reverse mortgages continue to thrive as borrowers move away from HECMs

The shift towards proprietary reverse mortgages is a notable trend in the industry, and it matters for homeowners and investors alike. With HECM volume declining to $880 million in Q3 2026, it's clear that borrowers are seeking alternative options. Proprietary reverse mortgages, also known as private-label loans, have filled this gap, reaching a total of $1.2 billion in the same quarter.

This trend is significant because it indicates a change in borrower preferences and a growing demand for non-FHA insured products. Historically, HECMs have been the dominant type of reverse mortgage, but their decline may be attributed to stricter regulations and changing market conditions. Proprietary reverse mortgages, on the other hand, offer more flexibility and may be more appealing to borrowers who want to tap into their home equity.

As the industry continues to evolve, it's essential to watch how proprietary reverse mortgages will be regulated and how they will impact the overall market. Homeowners and investors should keep an eye on interest rates, loan terms, and borrower protections. Additionally, it's crucial to monitor how HECM volume will respond to the growing popularity of private-label loans and whether we can expect a further decline or a potential rebound.

Originally reported by housingwire.com. PaintNews adds analysis for real estate & property readers.