The latest turmoil in the U.S to arise from the sub-prime crisis is likely to have some impact on the Australian reverse mortgage industry over the coming months.

The collapse of Lehman Brothers and bailout of the largest American insurer, AIG, are serious signals that this crisis is not yet over. Whilst Australia’s banking system is very solid, these events will further affect liquidity and overall economic confidence.

It is very likely that lenders will tighten the reins further, and this may result in credit rationing. The falling property market makes does not help the cause.

For seniors who are thinking of accessing funds via a reverse mortgage, there is no time to delay. It is very possible that lenders will soon restrict the amount of money they will lend on these loans. If this occurs, it will probably (hopefully) be a temporary measure of 1-2 years duration, but it will cause further aggravation for people who are struggling on the pension or have already seen their superannuation decimated by the share-market decline.

The message is simple: if you are thinking about a reverse mortgage, get in quick. Call Seniors First for help on  1300 745  745.   

It was announced yesterday that Mr Martin Lynch, director of reverse mortgages at ABN Amro, has been appointed Chairman of the Senior Australians Equity Release Association of Lenders (SEQUAL).

Having previously served as Deputy Chairman, Mr Lynch will thrive in the new role according to SEQUAL CEO, Kevin Conlon.

“Mr Lynch is well-placed to step up from the Deputy Chairman role. He has made a valuable contribution on the SEQUAL Board and has considerable experience in the design and delivery of Reverse Mortgages both within Australia and overseas.”

Lynch stated that his term on the SEQUAL Board has been meaningful and rewarding. “Over that time, SEQUAL has become widely recognised as an effective industry body which has guided the development of an efficient and ethical equity release market in Australia,” he said.

Lynch confirmed the emerging demand for equity release, saying that, “The largest generation within the Australian population is now aged between 45 and 60. Although many are poorly prepared for retirement, I have full confidence that this market will continue to meet the needs of Senior Australians as they face the challenge of funding their retirement.”