Home Equity Conversion Market Continues to Grow.

NEW YORK -- Only a relatively small number of rated reverse mortgage securitizations have been seen in the United States, but the market is gaining some momentum and may be about to see a surge of activity, according to a recent report by Standard & Poor's.

"Although there have only been a handful of U.S.-based reverse mortgage transactions to date, conditions are ripe for the market to explode," according to S&P.

S&P has rated reverse mortgage deals in the U.S., Canada and the United Kingdom and so far there have only been three S&P-rated U.S. transactions of this type, the largest of which was last year's $503.5 million Structured Asset Securities Corp. Reverse Mortgage Loan Trust 2005-RM1 deal.

But credit analyst Waqas Shaikh, a director in Standard & Poor's residential mortgage group and one of the authors of the report, "For Seniors, Equity Begins at Home," believes that "investors will become more comfortable with reverse mortgage securitizations."

Like a number of the product's proponents, S&P thinks reverse mortgages will prove increasingly attractive because they are designed to allow seniors to tap the equity in their home without leaving it as their other sources of income dwindle and because the U.S. population 65 and older is "poised for huge growth in the next 10 years." However, S&P also noted, "Despite their many attractions, reverse ...