Reverse mortgages can promote volunteerism among aging baby boomers and support President Barack Obama’s call to community service.

That was a lesson I took from my conversation with Paul and Irene Alexander of Hampstead, New Hampshire when I was researching my recently released book.

Pre-babyboomers and life-long volunteers, the Alexanders are parents  and grandparents. Paul retired as a human resource manager, and Irene served as a law firm receptionist.  They believe the reverse mortgage they took 6 years ago gave them the freedom to focus on helping others in their community.

“From a contribution basis, we were able to concentrate on contributing to other people’s quality of life, as well as our own,” Paul Alexander said.

Until Paul took ill three years ago, the Alexanders devoted 24 hours a week (or 1,248 hours a year) to volunteer work. Nationally, in 2007, about 61 million people volunteered in their communities and gave 8.1 billion hours of service valued at $158 billion, according to the Corporation for National and Community Service. Volunteering in America reported, between 2005 and 2007, 31.2 percent of boomers gave 52 hours a year to their communities. At 78 million, Baby Boomers could double the number of older adult volunteers in the coming decades.

They will help address needs in education and other areas. In education, for example, we will need more than 2 million new teachers in the next decade, especially in math, science, and special education. The teacher shortage is acute in urban and rural school districts. Because of expected structural shortage of skilled younger workers and competition with other industries for such workers, several battalions of Obama’s “army of new teachers” will have to come from highly-educated retired baby-boomers.

As Paul Alexander knows very well, the extra cash and the no-monthly-mortgage-payment benefit of reverse mortgages can give boomers the financial leeway to heed Obama’s call to serve their communities.

“If we had to work to pay our mortgage, that’s a different story. We wouldn’t be able to make those contributions.  It is a great social plus.  It [reverse mortgage] is truly one of the best things that has happened to this country in a long time,” he said.

Unlike the Alexanders, many baby boomers may have to work because more than half of them have a mortgage payment obligation. According to a MetLife Mature Market Institute demographic profile, 56 percent of younger boomers carry a mortgage. Among older boomers, it is 53 percent. These boomers will enter retirement with some monthly mortgage payment burden.

While some may find meaningful work that will also supply the cash they need, others may have to settle for work that may not fully use their skills and education or give them the flexibility they need in post-retirement work. That is where a reverse mortgage solution comes in.

How can reverse mortgages aid volunteerism? There are at least two ways. First, depending on mortgage balance and equity availability, a reverse mortgage stops the monthly negative cash-bleeding. Secondly, it increases positive cash in-flow, giving the boomer budgetary latitude to mix leisure with community service, enhancing life satisfaction.

The physical and the psychological health benefits of volunteerism are well-documented. With a massive and permanent aging population under way, the public health value and the resulting healthcare savings of volunteerism cannot be underestimated. Therefore, policy makers should look at how reverse mortgages can be used to advance volunteerism among baby boomers.

One way is for an Obama administration to ask Congress for money to waive the HECM reverse mortgage two-percent upfront mortgage insurance premium for eligible older adults who have given at least 500 hours of documented community service two years before applying for a reverse mortgage. Another is for Congress to give a $6,000 tax credit for those who gave 1,000 hours of service two years before getting a reverse mortgage.

During the presidential campaign, Obama promised a $4,000 college tuition credit each for students who commit to service as teachers in high-need communities.  Similar incentives should be considered via reverse mortgages for the legions of older adults who forgo retirement leisure to serve their communities and enrich our nation.

Think reverse. Move forward!

Atare Agbamu is the author of Think Reverse! (The Mortgage Press, coming this fall) and more than 100 articles on reverse mortgages. A reverse-mortgage specialist in Minnesota and an adviser to institutions across the country, he writes the Forward on Reverse column in The Mortgage Press, since 2002. Atare can be reached by email at This e-mail address is being protected from spambots. You need JavaScript enabled to view it