Reverse Mortgage Daily

First I would like to thank everyone for making this site so popular over the past few months.  In order to accommodate all of the traffic on the website I needed to start hosting it somewhere else.  If you are currently receiving updates by email you are going to need to re-subscribe by clicking on the link below.

Subscribe to Reverse Mortgage Daily by Email

If you don’t re-subscribe by clicking the link you will no longer get the updates delivered to your inbox.  Also, if anyone is using a RSS reader you will need to update as well.  I apologize for the inconvenience but moving hosts will make RMD even better.  Last thing… please continue to read RMD at reversemortgagedaily.com but feel free to come back here to see older posts.

Thanks again for your support!

John

Bank of America announced today that it has signed an agreement to acquire the reverse mortgage business of Seattle Mortgage Company, who is an indirect subsidiary of Seattle Financial Group, Inc.  SMC is the third largest producer of federally backed reverse mortgages and gives BOA a huge section of the reverse mortgage market.

BOA has been piloting their own reverse mortgage products with customers in Arizona since November of this year.  According to David Rupp, BOA Home Equity Executive who will oversee the integrated operation, “We will leverage Seattle Mortgage’s industry expertise with Bank of America’s leading distribution channels to achieve market leadership in this growing area of the financial services marketplace.”  Along with a reverse mortgage portfolio of over $4 billion in outstanding balances, approximately 400 SMC employees will join BOA as well as a retail sales force of more than 200 sales associates in 25 states. 

There was no word on any of the financial details of the transaction and according to the press release the deal is expected to close in the second quarter of 2007, pending regulatory approval.

To read a copy of the press release click the link below

Bank of America to Acquire Reverse Mortgage Business of Seattle Mortgage Company

Technorati tags: Reverse Mortgage, Bank of America, HECM, Senior Finance

Sun West Mortgage Company, Inc. has released their Cash Keeper™ product which allows seniors 62 or older to get a reverse mortgage on their second home.  The Cash Keeper™ is SWMC’s proprietary product that was released a few weeks ago to compete with the other jumbo products in the market. 

Cash Keeper™ Highlights:

• Based on 1-Month Libor Rate
• 6% lifetime cap, no monthly/annual cap
• Owner occupied and 2nd homes are eligible
• Payment Terms Available: Up front cash payment, credit line, monthly payment for a term, or a combination of the three
• Two margin options: 3.25% and 3.50%  (there is a .75% discount fee to receive the 3.250% margin)
• Home purchase program available
• Available balance grows at 5% per annum

Hari Agarwal, president of SWMC, states that, “the Cash Keeper fills a large gap in the current market place that was unaddressed until now. Our goal is to maintain our leadership position in the market through innovative mortgage products backed by state-of-the-art technology.”  Mr. Agarwal adds “In the next quarter, Sun West plans to introduce more proprietary products that will uniquely empower our broker-partners to service the needs of a wide range of senior homeowners”.  The Cash Keeper™ is supported along with the other HECM products by SWMC’s technology software Reversesoft™, which is their web based solution that they provide brokers and correspondents to help with the origination process.

The product seems to be very competitive when compared to others in the marketplace and it’s the first product that I’ve seen that enables a senior to obtain a reverse mortgage on their second home.  To read a copy of the full press release click the link below.

Sun West Introduces Cash Keeper, The Pioneering Jumbo Reverse Product

Technorati tags: Reverse Mortgage, HECM, Jumbo Reverse Mortgage, Senior Finance

Over the past year I have spoken to a few different companies that provide warehouse lines for reverse mortgage production, but I haven’t seen any lenders really advertise it.  Not that I really blame them because it adds a huge layer of risk to fund a product like reverse mortgages that are so new and constantly changing.  Here are just a few that I thought I would share with everyone. 

The first is Sun West Mortgage, Inc. who is based out of Cerritos, CA.  They do have a link to their website about  warehouse lines and if you don’t mind providing your contact information you can download a copy of their application.  One of their sales reps contacted me a few days ago and it seems like they are allowing a few different methods of delivery for reverse mortgage production.  I’ve also been told that Generation Mortgage is willing to offer their customers access to a warehouse line if the production volume meets a certain limit,  but I wasn’t able to find anything on the website confirming it.  The third and last company that I have come across is First Collateral which is owned by Citigroup.  I spoke with one of their account reps and they don’t have a large amount of customers that are using their lines for reverse mortgage production but they’re welcome to new clients that can provide substantial volume. 

It’s no secret that there are a lot of mortgage brokers out there who really want to obtain a warehouse line.  From my experience as a wholesale account executive most mortgage brokers look at a warehouse line as something “sexy” that they can tell all their AE’s and friends about to make themselves come off as a “big mortgage banker”.  In my opinion warehouse lines can be a great addition to someone’s business if it can be managed correctly, because it provides control over the entire mortgage process.  However, with all of the companies as of late that have had to repurchase loans from investors I wouldn’t think a lot of mortgage brokers are looking to get into funding their own loans… but I could be wrong.  I’d love to get some comments on using a warehouse line to fund reverse mortgage production if anyone has any. 

I hope everyone had a great weekend… the weather was beautiful here in Chicago.

Cheers!

Technorati tags: Reverse Mortgage, HECM, Warehouse Lines, Senior Finance

With all the subprime problems as of late it should be no surprise Wall Street is showing so much interest in reverse mortgage production.  Reverse mortgages provides Wall Street a high yield, low LTV, and federally insured mortgage product.  While the yield on a reverse mortgage may not be quite as high as your typically subprime loan, risks are slim to none when compared with an option ARM or 2/28 loan.  If you attended the NRMLA conference a few months ago it was evident that Wall Street has lots of interest in reverse mortgage production.

Yesterday Mortgage Data Management Corp. issued a press release that announced the addition of reverse mortgage loans to its due diligence review service offerings.  While the company reviews a variety of mortgage loans, the addition of reverse mortgage loans is a direct response to the sharp increase in the volume of loans as well as the interest MDMC’s clients have shown to purchase these loans in the secondary market.

According to Doug Lackey, principal of Mortgage Data Management Corp, “We strive to meet the ever-changing needs of our clients, so when several of our Wall Street investment bank clients approached us about adding reverse mortgages to our review, we quickly made the adjustment.”  MDMC has been reviewing reverse mortgages since October of 2006 in limited capacity but as of late the company has seen an increase in volume.  Karen Callans who has over 40 years of industry experience has been appointed to review and further develop MDMC’s review procedures to include reverse mortgages. “We spend at least one week a month reviewing reverse mortgages,” explains  Callans.  “As the subprime market continues to slow down, we expect to see more and more business come from reverse mortgages.” 

To see a copy of the press release from MDMC click the link below

MDMC Adds Reverse Mortgages to Due Diligence Review

Technorati tags: Reverse Mortgage, HECM, Wall Street, Reverse Mortgage Securities

The Expanded Home Ownership Act of 2007 H.R. 1852 was introduced by Maxine Waters and Barney Frank on March 29th.  If passed relatively intact it could make some interesting changes to the HECM program.  Along with other changes the bill proposes allowing a HECM to be used to fund the purchase of a new primary residence (1-4 Family Dwelling).  Currently, the Fannie Mae Homekeeper™ program enables the borrower to purchase a new primary residence but the product has never taken off quite like the HECM in recent years.  The bill also proposes a study regarding mortgage insurance premiums in which they would analyze and determine:

(1) the effects of reducing the amounts of such premiums from the amounts charged as of the date of the enactment of this Act on–

(A) costs to mortgagors; and(B) the financial soundness of the program; and

(2) the feasibility and effectiveness of exempting, from all the requirements under the program regarding payment of mortgage insurance premiums (including both up-front or annual mortgage insurance premiums under section 203(c)(2) of such Act), any mortgage insured under the program under which part or all of the amount of future payments made to the homeowner are used for costs of a long-term care insurance contract covering the mortgagor or members of the household residing in the mortgaged property.

While no one knows if this bill will pass, it’s good to see people making an effort to improve the HECM product.  If you would like to see more details of the bill click the link below:

The Expanded Home Ownership Act of 2007

Technorati tags: HECM, Reverse Mortgage, Fannie Mae, Senior Finance, FHA

Just a few reverse mortgage links from the week.

• Your Later Years Can Be Golden Without Being Gold-Plated (US News)
• From Cheque Books to Checking Pulses (The Economist)
• PNB to Launch Reverse Mortgage Loan for Seniors (Hindustan Times)
• Reverse Mortgage Solutions (RMS) Begins Operations (PR Newswire)
• Tom Scarbareti Joins Lender Lead Solutions (Business Wire)

Have a great weekend!

Cheers.

del.icio.us tags: Reverse Mortgage, Reverse Mortgage News, HECM, Senior Finance

I never would have thought you would see a retirement home/assisted living high rise on Lake Shore Drive in Chicago, but apparently its coming soon.  Today I came across an article from the NY Times called “Retirement Homes Go High-Rise” which describes a new waive of ”high end” retirement communities that are starting to pop up in urban settings like Chicago, New York, and Dallas.  While the buildings themselves may look like your typical high rise that we see in the city, they are regulated as insurance or health care products, depending on the state in which they are located. These communities must comply with licensing requirements for skilled nursing and residential care facilities.  Officials also monitor the communities’ finances to ensure that providers can meet their service obligations.

According to the article, a couple in Chicago who is moving into a unit in The Clare (Model Pictured Above) will pay a $1 million entry fee for a 1,700-square-foot apartment on the 44th floor, with views of Lake Michigan. On top of the hefty entry fee there is also a $5,000 monthly fee, which covers one meal a day, maid service and utilities.  What I thought was very interesting was that 90% of The Clare entry fee is refundable at the same rate to the resident’s estate should they chose to move out of the facility.

To the best of my knowledge there is no reverse mortgage product out there at the moment that would allow a reverse mortgage on something like this.  Essentially the lender could use the entry fee as equity since it will be 90% refundable at the same rate when they chose to move out or pass away.  The biggest issue would be what would happen if the project went under and your entry fee wasn?t there anymore?  I haven’t seen any of the contracts for these units so I’m not really sure but I thought someone who reads this may have a better idea.  Now I know a product like this is a long shot but I thought I would toss it out there and see what everyone’s response was.  If you would like to read the entire article click the link below

“Retirement Homes Go High-Rise”

Technorati tags: Reverse Mortgage, Long Term Care, Retirement Homes, Senior Finance

I received some information from Countrywide regarding there reverse mortgage product offering over the weekend.  At the moment they are offering the HECM annual and semi-annual (both based off the HECM 100) as well as their Simple Equity™ program which is their proprietary jumbo product.  Below are more details of the Simple Equity™ program.

• Eligible Homes - SFR, Condo, PUD, 1-2 Units (borrower(s) must occupy one of the units)
• Monthly Servicing fee - $20
• No minimum cash drawn at closing
• Variable Semi-Annual Libor ARM
• Margin - 3.5%
• No period cap, lifetime cap = 6 points above interest rate
• Funds are available as

• Lump sum - all of the available line taken out at close
• Term - a fixed monthly payment for a specific amount of time
• Line of credit - credit line grows monthly at .417% or 5% annually.  Minimum line of $50,000

The website allows you to input the borrowers information and get pricing details which I prefer over the software that most reverse mortgage lenders require you to use.  If you are an FHA approved broker with countywide the reverse product suite should be available to you.

I hope everyone had a great Easter weekend, cheers!

Technorati tags: Reverse Mortgage, HECM, Simple Equity, Countrywide, Senior Finance

Just a quick update that I received from Reverse Mortgage Information on the top HECM Lenders for March 2007.  This information is taken directly from HUD’s website.  

Have a great weekend!