The reverse mortgage market peaked in 2008, when the industry funded 114,923 loans, but fell off sharply in the following years, according to Reverse Market Insight. In 2013, 60,923 reverse mortgages were completed. This year, as of the end of April, firms funded just 19,015 loans, compared with 21,632 loans at the same time in 2013.
The industry has historically drawn its fair share of scorn for using older Hollywood actors to hawk their product on late-night television advertisements. Some consumer advocates have complained that the reverse mortgage business preys on the financially ill-informed, who might be better off simply selling their homes and banking the cash than entering into a transaction that pays a premium to a lender.
But for those over the age of 62 who want to stay in their homes and owe little to nothing on a mortgage, the investment product has its appeal. The loans, which are guaranteed by the Federal Housing Administration, often do not need to be paid back until borrowers either sell their homes or die. Borrowers can get a line of credit, a lump-sum payment, or monthly payments through a reverse mortgage, also known in the industry as a home equity conversion mortgage.
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To limit the potential for losses, the F.H.A., a division of the Department of Housing and Urban Development, recently imposed restrictions that limit the amount an elderly person can borrow and make sure the borrower has enough money to continue paying for insurance coverage on a home and property taxes.
Daniel Alpert, managing partner of Westwood Capital, an investment firm that specializes in advising on real estate transactions, said much of the early "hucksterism" surrounding the reverse mortgage business had disappeared and the industry was becoming more mainstream and professional. But he said that even as reverse mortgages became a safer investment product, it was unclear just how big the market would be — even with baby boomers approaching retirement age.
"It presupposes that people have a preference to stay in their homes as opposed to selling those homes and downsizing," Mr. Alpert said.
Investors in Reverse Mortgage Funding's private REIT are betting a higher percentage of baby boomers will choose to remain in their homes if given the choice. In a private REIT, investors are typically paid a dividend based on the firm's earnings.
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Reverse Mortgage Funding declined to discuss the number of reverse mortgages it has funded this year.
Mr. Corn and his colleagues are planning for the long haul. The firm, which also has an office in Melville, N.Y., on Long Island, has about 100 employees. And the company's headquarters in Bloomfield is in the same office space that Mr. Corn and his colleagues occupied when they were at MetLife.
In some ways, it is as if Mr. Corn and his colleagues never left. "It's the exact same office. The same furniture," Mr. Corn said.
—By Matthew Goldstein of The New York Times