More Choices for Older Homeowners Seeking Home Equity Options
NEW YORK (May 22, 2018) – Three top reverse mortgage companies announced the imminent availability of new propriety loan products and features for older homeowners yesterday during a session of the National Reverse Mortgage Lenders Association’s 2018 Eastern Regional Meeting in Times Square.
Executives from Reverse Mortgage Funding, LLC (RMF), Longbridge Financial, and Finance of America Reverse (FAR) described private reverse mortgage offerings that will be ready for market as soon as June 1, on a panel alongside Reza Jahangiri, chief executive officer of American Advisors Group, and Michael McCully, co-founder and partner of New View Advisors, LLC, who moderated the discussion.
According to the panelists, ongoing changes to federally-insured Home Equity Conversion Mortgages, which dominate the marketplace, are a major motivation for the new product innovations. “The idea that nearly our entire industry relies on the federal government for what it does, in addition to all of the state rules…it’s really hard to run a business that’s so heavily dependent on Washington,” said Longbridge Financial CEO Chris Mayer, PhD. “It is important to offer non-FHA reverse mortgages so the industry is insulated from policy changes and can serve a wider variety of customers.”
Mayer announced that Longbridge will launch multiple proprietary products this year, beginning in July with a fixed-rate loan tailored specifically to the wholesale market that offers borrowers very low-upfront costs depending on their circumstances, among other features.
Recent changes to the HECM program that impact the amount of funds available to borrowers spurred RMF to move forward with its plans to introduce its new proprietary Equity Edge Reverse Mortgage™. “We knew it was time to roll out a product that focused not only on high home values, but also filling a lot of voids left by the HECM product today,” said RMF President David Peskin.
Equity Edge, coming to market in five states on June 1, is the industry’s only reverse mortgage that will be available to borrowers as young as 60 years old (where permitted by state law). It is geared towards homeowners and homebuyers with home values of $700,000 or more, and provides an option for those who own or want to purchase a non-FHA-approved condominium.
FAR’s vice president of wholesale lending Jonathan Scarpati offered a review of his company’s now four-year-old HomeSafe® proprietary reverse mortgage and announced the launch of a new product feature coming this summer. The Flex option for HomeSafe® will allow borrowers to get a fixed-rate loan and take up to 40 percent of their proceeds in the form of term payments for up to five years, instead of being limited to a lump sum full draw.
“It’s exciting to hear that two new competitors are coming into the market with proprietary products. It will lead to innovation and most importantly, provide more options to borrowers,” said Scarpati.
The news comes only two months after Jahangiri announced American Advisors Group’s expansion into additional home equity solutions, including “forward” mortgages and its partnership with FAR to begin selling the company’s proprietary HomeSafe® product.
“We can’t keep doing what we’ve been doing in the past and proprietary product innovations are a great step in the new direction,” said Jahangiri.
About the National Reverse Mortgage Lenders Association
The National Reverse Mortgage Lenders Association (NRMLA) is the national voice for the industry and represents the professionals responsible for more than 90 percent of reverse mortgage transactions in the United States. All NRMLA member companies commit themselves to a Code of Ethics & Professional Responsibility. Learn more at www.nrmlaonline.org.
Media Contact: Jenny Werwa, 202-939-1783, firstname.lastname@example.org