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Posts Tagged ‘lenders’
Thursday, October 8th, 2009
 NRMLA President Peter Bell testified in front of the House Subcommittee on Housing and Community Development today as part of a panel of witnesses on the future of the FHA. While Commissioner Stevens’ statements were written up in the New York Times, Bell’s comments provided a number of interesting anecdotes on the state of the reverse mortgage industry.
Bell talked about the risks to both borrowers and lenders. Borrowers risks include finding out they do not have enough money to remain in the home due to property taxes and insurance. These issues, which we have covered extensively in the past few weeks, only effect 2% of borrowers, and efforts are underway to help mitigate those risks. Lenders risks include being stuck funding a loan that is unable to get a certified by HUD. HUD is reducing this risk, by decreasing the Principle Limit Factors last week, and eliminating the need for a credit subsidy to the reverse mortgage program.
However, Bell’s main purpose in his testimony appeared to be to convince the House Subcommittee to extend the current reverse mortgage limits and to ultimately return to the prior Principle Limit Factors. HECMs have had a net gain of 7 billion dollars in the course of the program, and Bell argues that reverse mortgages have not played a role in the FHA’s recent capital reserve problems. Reverse mortgages are expected to operate on a break even or better basis in the future.
Furthermore, recent changes to the program will impede the ability of seniors to get a reverse mortgage. Over 20% of reverse mortgage borrowers in the last year would not have qualified if the Principle Limit Factors had been reduced to their current levels when they applied for the loan. New technology has reduced costs for lenders, and Bell maintains that the numbers used by the Office of Management and Budget (OMB) are not realistic, since the average lifetime of a reverse mortgage loan is 7 years regardless of the age of the borrower. Older borrowers average the same length of time with a reverse mortgage as younger borrowers. Bell was passionate that the reverse mortgage program has been self-sustaining and will continue to operate as such.
Tags: borrowers, FHA, House subcommittee, HUD, lenders, New York Times, NRMLA, OMB, Peter Bell, principle limit factors, reverse mortgage, reverse mortgages
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Wednesday, October 7th, 2009
 In a move that is designed to help the housing industry, the Wall Street Journal reported today that Fannie Mae and Freddie Mac are working on a program to help smaller banks get the short term credit needed to help them make home loans. This would come in the form of Fannie Mae and Freddie Mac making advance commitments to buy home loans that meet a certain criteria. The program builds on a pilot program already underway between Freddie Mac and NattyMac and Provident Lender Associates LP.
While it seems that much of this plan has yet to be announced, any assistance to small banks appears to be welcome. Another column in the Wall Street Journal pointed out that there are over 8,000 mortgage lenders nationwide (not counting reverse mortgage lenders). When one considers that the majority of mortgage loans tend to be completed by the three major banks- Wells Fargo, Bank of America, and JP Morgan Chase. These three lenders alone account for 52% of new home mortgages, up 15% from the 37% market share for the top 3 lenders in 2007. An increase in market share for the top lenders likely doesn’t bode well for the industry though. As a result, it will be interesting to see if the plan with Freddie Mac and Fannie Mae will help revitalize the mortgage industry by helping the smaller lenders.
Tags: Bank of America, fannie mae, Freddie Mac, home loan, home loans, housing industry, J.P. Morgan Chase, lenders, Mortgage, mortgages, NattyMac, Provident Lender Associates LP, reverse mortagages, reverse mortgage, Wall Street Journal, wells fargo
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Tuesday, September 22nd, 2009
 Reverse Mortgage Guides is pleased to announce the launch of a new section of the site entitled, “Tools for Lenders.” The Tools for Lenders section includes tools for reverse mortgage lenders and loan officers, as well as for those wishing to enter the reverse mortgage industry. Some features include:
- a free downloadable reverse mortgage calculator
- a reverse mortgage industry job board
- a link to the industry news section of Reverse Mortgage News
- an article with advice on how to get started in the reverse mortgage industry
We expect the section to continue to grow in the future, and welcome feedback as to what you would like to see in the section. In addition, we have decided to open the section to advertising. If you are interested in advertising within the lender section, contact reva.minkoff (at) reversemortgageguides.org.
A link to the section can be found in the footer of nearly any page on Reverse Mortgage Guides.
Tags: advertising, job board, lender, lenders, reverse mortgage, reverse mortgage calculator, reverse mortgage guides, reverse mortgage industry, reverse mortgage job, reverse mortgage jobs, Reverse Mortgage News, reverse mortgages
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Monday, September 14th, 2009
 As Reverse Mortgage Guides prepares to launch its new section for reverse mortgage lenders, it has decided to open up the Lenders section to advertising. Advertising, which will only be available on the Lenders pages, should therefore be targeted to those within the reverse mortgage industry. Rates are expected to start at $60/month, with discounts available for those advertisers that link to Reverse Mortgage Guides. For more information or to advertise on Reverse Mortgage Guides, please contact Reva Minkoff at reva.minkoff (at) reversemortgageguides.org.
Tags: advertising, lenders, rates, reverse mortgage, reverse mortgage lender, reverse mortgage lenders, Reverse Motgage Guides
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Friday, August 21st, 2009
 A federal judge in Manhattan ruled yesterday that the Helping Families Save Their Homes Act of 2009 did not exempt Countrywide from investor lawsuits. Countrywide had argued that the federal legislation automatically voided its pledge to buy back loans from investors if those loans were modified for troubled borrowers. The Helping Families Save Their Homes Act of 2009 was meant to help encourage servicing companies to modify loans, in part by providing some protection under liability arising from loan changes.
However, many of the mortgages owned by Countrywide (which has since been purchased by Bank of America), are owned by investors. The investors receive interests and principal payments from borrowers over the life of the loans. When the loans are modified, these payments are typically reduced. The investors are arguing that when Countrywide and Bank of America agreed to modify the loans, they breached their contract with the investors.
The ruling in the case said that the legislation did not prevent Countrywide’s investors from trying to enforce their rights under the mortgage servicing contracts. It would be up to the investors to prove that Countrywide’s pooling and servicing agreement requires it to repurchase the loans the bank modifies. The case would be in state court, outside of federal jurisdiction. Countrywide wanted the case to take place in federal court, due to the law being a federal law.
This case has some interesting implications. Right now, the Obama Administration has made it their priority to modify mortgages for borrowers, attempting to help the over 13% of homeowners who are currently delinquent on their mortgages. However, this case shows that even if the servicing companies and lenders agree, other parties, such as investors and hedge funds, may object. Certaintly there are bound to be losers from the housing bust and subprime mortgage crisis- the question is who will bear the brunt of the blow. As individuals argue in their self interest, it appears dangerously likely that the good of the collective whole will suffer.
Tags: Bank of America, Countrywide, home loans, investor, investors, lawsuits, legislation, lender, lenders, loan, loan suit, loans, Mortgage, mortgages, ruling, servicing companies, subprime mortgage crisis, The Helping Families Save Their Homes Act of 2009
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Wednesday, August 5th, 2009
 HECM volume increased dramatically this month. 9,830 HECMs were endorsed in July, up from 8,633 last month. This is a good sign if 2009 HECM volume is to surpass the HECM volume in 2008.
The same 9 lenders continued to possess an increased market share despite one of them (World Alliance Financial Corp) going out of buisness last month. One wonders if the increased number of endorsed HECMs from World Alliance Financial Corp (also known as Senior Lending Network) are a result of them trying to close out their pipeline as fast as possible. World Alliance Financial Corp rose to the #3 spot this month from number 4 a month ago. It will be interesting to see if they remain in the #3 spot next month.
The top nine lenders are ordered below with rankings determined by the number of HECMs endorsed by the lenders YTD. Financial Freedom only endorsed 10 HECMs last month, while Countrywide endorsed 8. One Reverse Mortgage surpassed Countrywide this past month in HECMs closed YTD. Countrywide was acquired by Bank of America back in January, and it will be interesting to see if the HECM volume attributed to them continues to decline as well (so far it looks as if it has).
Finally, it is important to note that only nine lenders were highlighted because several lenders, led by 1st AAA Reverse Mortgage Inc. are clustered under Urban Financial. This group has closed between 900 and 960 leads so far this year, but is still well under Urban Financial’s totals.
Top Nine HECM Lenders by Volume – June
1. Wells Fargo
2. Bank of America
3. Financial Freedom
4. World Alliance Financial Corp.
5. Countrywide
6. One Reverse Mortgage
7. MetLife
8. Generation Mortgage
9. Urban Financial
Top Nine HECM Lenders by Volume – July
1. Wells Fargo
2. Bank of America
3. World Alliance Financial Corp.
4. Financial Freedom
5. One Reverse Mortgage
6. Countrywide
7. MetLife
8. Generation Mortgage
9. Urban Financial
The complete lender list can be found here.
Tags: 1st AAA Reverse Mortgage, Bank of America, Countrywide, financial freedom, generation mortgage, hecm, HECM volume report, July, June, lender, lender list, lenders, MetLife, One Reverse Mortgage, reverse mortgage, reverse mortgages, Senior Lending Network, Urban Financial, wells fargo, World Alliance Financial Corp
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Wednesday, July 22nd, 2009
 As in any industry, there are good reverse mortgage officers and not so good reverse mortgage officers. The following are some ways to help separate the good from the bad.
1. Does Not Return Phone Calls- Communication is an important part of the relationship between a reverse mortgage officer and their client. The process is not always straight-forward, and the borrower may have questions along the way. Therefore if the reverse mortgage officer regularly does not return calls or does not return calls for long periods of time, it may be time to look elsewhere.
2. Unavailable – In the same vein as #1, if a reverse mortgage officer is continually unavailable, it is hard to complete a reverse mortgage transaction. If the borrower wants to meet with the reverse mortgage officer or has a question for them, the borrower should be able to reach them. If they continually can’t, it may be time for the borrower to find a reverse mortgage officer they can talk to.
3. Part-time Gig – While economic times have meant that people may be trying to add extra jobs to make up for a loss of income, the point that your loan officer is more likely to pay more attention to your case and do a better job on the file if getting dinner on the table is on the line is a valid one. Especially if your reverse mortgage officer has another job in a completely unrelated field, you may want to find one who specializes in their trade and can give your file the attention it needs… full-time.
4. Weary Traveler – Although economic times have led more people to switch jobs recently than they may have liked, be wary of a reverse mortgage officer who has switched companies extensively over the course of their career. There may be a reason why.
5. Inconsistent Answers/Unknowledgable – Reverse mortgages may not be the most basic product on the market, but a good reverse mortgage officer should be able to answer most questions you may have and know where to go to get the answers to the rest. Beware of reverse mortgage officers who change their answers or are inconsistent. Also beware if there are many questions that they cannot answer. And while most states require loan officers to be certified, if a borrower is suspicious they can always check to make sure their officer is licensed.
6. Pushy or Impatient- A reverse mortgage is a significant financial decision, so beware of reverse mortgage officers who try to push the decision on the borrower or hurry the borrower through the process. The loan officer should make sure that the borrower is comfortable with the process. If the borrower feels uncomfortable, they might want to seek out a reverse mortgage officer who will make them feel more so.
7. Behavior problems- See if any complaints are on file against your reverse mortgage officer or their company. If there are, borrowers might want to receive an explanation and possibly a different officer to work with.
Tags: bad reverse mortgage officer, borrower, borrowers, lender, lenders, loan officer, loan officers, reverse mortgage, reverse mortgage officer, reverse mortgage officers, reverse mortgages, warning signs
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Tuesday, May 5th, 2009
 While reverse mortgage fraud is less common than some would have one believe, it still occurs. Below are some warning signs and what you can do to stop them:
1. If You Don’t Receive An Estimate or a Good Faith: Lenders should be able to tell a borrower how much money they can expect to receive up front. There are many reverse mortgage calculators available online (reverse mortgage calculator) that can also tell borrowers this information. As a result, be suspicious if a lender doesn’t tell the borrower how much money they can receive or can’t provide an explanation of how the amount was determined.
In addition, at closing, lenders are required to provide the borrower with a “Good Faith,” which lists all of the costs and fees of the reverse mortgage. The borrower should make sure a good faith is presented and that they are familiar with its contents.
2. Never Heard of the Lender
If you have never heard of the lender before, it makes sense to check the HUD website or another lender list and make sure that they are listed and accredited.
3. Don’t Talk About Counseling
Reverse mortgage counseling by a third party is a mandatory part of the reverse mortgage process. Be wary of anyone who does not talk about counseling or dismisses it as unnecessary. It is required to get a federally insured reverse mortgage and, depending on the state, most proprietary ones.
4. No One Answers the Phone
If your calls go unanswered, especially for long periods of time, it might be best to proceed with caution. Everyone is busy and many loan originators travel to meet with clients and for closings. However, there should be an answering machine if this is the case.
5. Try to Cross-Sell
Cross-seling, the practice of selling more a product along with a reverse mortgage, is prohibited. One of the most common reverse mortgage scams involves the lender convincing the borrower to take out a reverse mortgage and use the proceeds to buy insurance or make investments. A lender cannot, by law, speak to the borrower about anything other than a reverse mortgage. Therefore, if a lender tries to sell a borrower a product– especially an investment product– be wary. It is not permitted.
Tags: borrowers, Cross Selling, good faith, HECM counseling, lenders, reverse mortgage, reverse mortgage fraud, reverse mortgage scam, reverse mortgage scams, reverse mortgage warning signs, reverse mortgages
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Tuesday, April 21st, 2009
The ReverseMortgageGuides.org Calculator was featured in this month’s issue of “Reverse Mortgage,” the official magazine of the National Reverse Mortgage Lenders Association. The article talks about the proliferation of online web applications for reverse mortgage lenders. The Reverse Mortgage Toolkit features a free calculator that can be embedded in a lenders’ site in only a few minutes. A more enhanced, paid version is in development.
Links to the calculator for both lenders and borrowers can be found below:
Reverse Mortgage Calculator (Borrowers): http://www.reversemortgageguides.org/reverse_mortgage_calculator.php
Reverse Mortgage Toolkit (Lenders): http://www.reversemortgageguides.org/toolkit/
Tags: borrower, borrowers, calculator, lender, lenders, links, NRMLA, reverse mortgage, reverse mortgage calculator, reverse mortgage calculators, Reverse Mortgage magazine, reverse mortgage toolkit, reverse mortgages
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Monday, April 13th, 2009
 Last week, NRMLA (National Reverse Mortgage Lenders Association) announced that it is planning on offering a new designation for Certified Reverse Mortgage Professional/Loan Originators. To receive the credential, candidates will need to have at least 2 years of experience, closed over 50 loans, take 12 hours of classes, and pass a background check before they can even take the exam.
NRMLA cites the certification as an important step towards protecting consumers in reverse mortgage transactions. However given the size of the reverse mortgage market, it seems likely that the designation will be more easily available to those from larger firms and to those who specialize in reverse mortgages.
While there is clearly an advantage to specializing in reverse mortgages, there are many small lenders and independent loan officers. Although the designation is a useful step to help enfranchise consumers and ensure quality, the certificate should be available to dilligent and experienced officers at all firms– not just those that conduct the largest volume of reverse mortgages and have the largest amount of resources.
Tags: banks, certification, lenders, loan officers, loan originators, National Reverse Mortgage Lenders Association, NRMLA, reverse mortgage, reverse mortgage industry, reverse mortgage lenders, reverse mortgages
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NRMLA President Peter Bell testified in front of the House Subcommittee on Housing and Community Development today as part of a panel of witnesses on the future of the FHA. While Commissioner Stevens’ statements were written up in the New York Times, Bell’s comments provided a number of interesting anecdotes on the state of the reverse mortgage industry.
