Low Margin HECMs Become the New Standard
Print This Post
When BNY Mortgage announced several weeks ago that it would offer Home Equity Conversion Mortgages (HECM) reverse mortgages to borrowers at a reduced margin of 1.00 over the one-year US Treasury rate, it was clear that competing lenders would have to respond sooner or later. A couple weeks later Wells Fargo, the largest reverse mortgage lender by far, announced its own 1% margin HECM loan product. Since then, press releases announcing lower margin HECMs have been coming out almost non-stop:
CERRITOS, Calif./EWORLDWIRE/Feb. 22, 2007 — Sun West Mortgage Company, Inc., one of the leading innovators in the reverse mortgage industry, is proud to offer the HECM 100 and 125 to complement the traditional HECM150 product. These new HECM products allow Sun West’s broker partners to remain competitive as the secondary market for reverse mortgages becomes more efficient.Sun West Mortgage
The HECM 100 and 125 are fully integrated into Reversesoft and are available immediately. Reversesoft is Sun West’s origination, processing and servicing system for reverse mortgage loans
BABYLON, N.Y./EWORLDWIRE/Feb. 19, 2007 — Advanced Funding Solutions of Babylon, N.Y. expands its line of reverse mortgage programs to include lower costs and greater funds available to senior homeowners.
Announcing today that it has lowered costs, interest rates and increase available funds associated with its reverse mortgage offerings, Advanced Funding is staying in the forefront of protecting seniors and providing true benefit. Due to recent changes in the HECM program, lower interest rates combined with more funds available to senior homeowners translates into a winning combination to seniors. In addition, Advanced Funding Solutions has lowered certain fees in conjunction with the new programs to make them even more attractive and more practical to an older population.
RICHMOND, Va./EWORLDWIRE/Feb. 15, 2007 — Live Well Financial, Inc., one of the nation’s leading reverse mortgage lenders, announced the offering of a new federally-insured Home Equity Conversion Mortgage (HECM) that provides homeowners with access to more cash while also reducing the margin on the product.
“Live Well Financial is proud to be able to offer the new HECM 100 Monthly product to our senior customers. This HECM product offers more proceeds at a lower rate of interest than the standard HECM 150 Monthly product,” said Michael Hild, chairman, president and CEO of Live Well Financial. “The reverse mortgage industry has gone far too long without any true product innovations. Live Well Financial is happy to be a part of this new offering, and we look forward to many future products that will allow seniors additional options and lower costs.”
DATELINE: BRAINTREE, MA…Harbor Mortgage Solutions, Inc. of Braintree, MA has announced the availability of a new reverse mortgage program, the HECM 100. The HECM 100 is a FHA/HUD insured Home Equity Conversion Mortgage (HECM) that features an interest rate that is one-half percent lower than the current HECM reverse mortgage program rate.
Harbor Mortgage President, Chris Downey commented, “This is a significant breakthrough in the reverse mortgage marketplace. The HECM 100 enables senior homeowners to be eligible to receive greater cash benefits up front along with lower interest costs over the life of the loan. The one-half percent rate advantage will carry forward for the life of the loan.”
SEATTLE–(BUSINESS WIRE)–Seattle Mortgage (SMC), a leader in the reverse mortgage industry, has expanded their product offering to include reduced margin loans for both the HECM monthly adjustable and the HECM annual adjustable mortgage, therefore lowering costs for senior borrowers.
Designed for senior homeowners, reduced margin loans can provide a higher percentage of available equity and reduced life of loan accrued interest. For instance, a 72 year old couple with a home valued at $325,000 would be eligible for an additional $14,000 in available funds using the reduced margin HECM with a 1.00 margin.(1) They would also save thousands of dollars in interest over the life of the loan.
These enhancements will offer senior borrowers the option to compare 1.00, 1.25, and 1.50 margins on the monthly adjustable HECM and 2.60, 2.85, and 3.10 margins on the annually adjustable HECM.
Clearly HECM loans with a 1.00 margin over the one-year US Treasury rate are the new standard. We have adjusted the reverse mortgage rate tool accordingly and will be reporting the lower margin HECM rate from now on. This is the reason for the sharp drop showing on this week’s interest graph. (The underlying one-year US Treasury rate actually was unchanged from the prior week.)
Article Series - hecm100
A Few More Related Articles of Interest:
March 1st, 2007 at 11:41 pm
I FINALLY FIND A GREAT SPOT FOR INFO ION A CURRENT BASIS ON HECM 100 AND GOOGLE HAS ITS AD~S COVERING THE PRINT AND CHARTS FIX IT ……………….