Wade Pfau: how market volatility could renew reverse mortgage discussion
Didier Malagies • April 15, 2025
Wade Pfau, a leading voice in retirement income planning, has long advocated for the strategic use of reverse mortgages—and current market volatility could reignite interest in this often misunderstood tool.
🔁 Why Market Volatility Renews Reverse Mortgage Talks
In times of market downturn, retirees face sequence of returns risk, meaning early losses can severely impact the longevity of their portfolio. Pfau suggests that reverse mortgages, particularly Home Equity Conversion Mortgages (HECMs), can act as a buffer asset to avoid selling investments at a loss. Here's how:
- During market dips, retirees can pull funds from a reverse mortgage line of credit instead of their investment accounts.
- This gives their portfolios time to recover before resuming withdrawals.
- Result: More sustainable income and potentially greater long-term financial security.
🧠 Shift in Strategy: Not Just a Last Resort
Pfau argues that reverse mortgages should be considered early in retirement planning, not just as a last-ditch effort:
- Opening a HECM line of credit early can grow over time due to the compounding credit line.
- Provides flexibility and tax-efficient access to funds.
- Helps retirees coordinate income sources between portfolio withdrawals, Social Security, and home equity.
👓 Changing Advisor Perspectives
Financial advisors—previously skeptical—are beginning to see reverse mortgages in a new light:
- Volatile markets have prompted a more open-minded view among planners.
- More are incorporating reverse mortgages into holistic retirement income strategies.
Bottom line: Market volatility doesn’t just threaten retirement—it also opens the door to rethinking traditional strategies. As Pfau puts it, home equity is too significant a resource to overlook, and when used wisely, reverse mortgages can enhance retirement resilience
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We're excited to share a major update that will make the homebuying process more secure and less stressful. President Donald Trump recently signed the Homebuyers Privacy Protection Act of 2025 into law. This bill is a significant victory for the real estate industry, as it directly addresses the problem of unwanted calls, texts, and emails that often flood clients upon mortgage application. What's Changing? For years, many borrowers have experienced a barrage of unsolicited contact from different lenders immediately after their mortgage application. This happens because of "trigger leads"—a process where credit reporting agencies sell information to other companies once a credit inquiry is made. Effective March 5, 2026, this new law will put a stop to this practice. It will severely limit who can receive client contact information, ensuring client privacy is protected. A credit reporting agency will only be able to share trigger lead information with a third party if: • Clients explicitly consent to the solicitations. • The third party has an existing business relationship. This change means a more efficient, respectful, and responsible homebuying journey. We are committed to a seamless process and will keep you informed of any further developments as the effective date approaches. In the meantime, you can use the information below to inform clients how to proactively protect themselves from unwanted solicitations. Opting Out: • OptOutPrescreen.com: You can opt out of trigger leads through the official opt-out service, OptOutPrescreen.com. • Do Not Call Registry: You can also register your phone number with the National Do Not Call Registry to reduce unsolicited calls. • DMA.choice.org: For mail solicitations, you can register with DMA.choice.org to reduce promotional mail. Didier Malagies nmls212566 DDA Mortgage nmls324329
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