|
|||
| Brokers can originate reverse mortgages through a newly launched program without being FHA approved. While it isn’t the only product of its kind, required counseling was hailed by one trade group.
Anaheim, Calif.-based Pacific Community Mortgage Inc. recently announced the addition of a new non-FHA reverse mortgage product for refinances, purchases and qualified second homes with no maximum lending limit. The Cash Plus program has similar eligibility requirements to that of the FHA-insured Home Equity Conversion Mortgage and the Fannie Mae Home Keeper reverse mortgage products but does not require the broker to be FHA- or Fannie-approved to originate or deliver the loans, the announcement said. The reverse mortgage program requires the borrower’s minimum age be 62, has a 2% maximum origination fee — all to the originator, and is a non-recourse loan. No mortgage insurance is required for the loan, there are no credit or employment qualification and the borrower can choose a cash, credit line or monthly payment term. Cash Plus is currently being offered in 14 states: California, Colorado, Utah, Arizona, Nevada, Idaho, Oregon, Washington, Missouri, New Mexico, Mississippi, Florida, Connecticut and Massachusetts, according to Pacific spokesman Cliff Auerswald. Because the program is so new, it is first being offered only to licensed mortgage brokers, Auerswald told MortgageDaily.com. But eventually there will be more product offers, correspondent approval and national expansion. Approved broker partners are given free access to the online origination software where they can carry out all processing from running the reverse mortgage calculator to printing their complete credit package and loan submission, the announcement said. “The growth of the reverse mortgage market with additional product offerings, both under HECM and without FHA-insurance, is a good development for consumers,” Peter Bell, president of the National Reverse Mortgage Lending Association, told MortgageDaily.com in an e-mail statement. “Greater competition will bring more product innovation among lenders. Costs to consumers could come down, as well.” Once Pacific approves the loan, the borrower receives the same third-party counseling for reverse mortgages as required by any FHA-insured program, Auerswald told MortgageDaily.com. The reverse organization endorses the third-party counseling for all reverse mortgage applicants, Bell noted, even if the borrower is getting a proprietary product that doesn’t require it by law. “We believe counseling to be a valuable best practice that protects both the homeowner and the lender,” Bell said. Financial Freedom, an Irvine, Calif.-based reverse mortgage originator and servicer and IndyMac subsidiary, also offers both FHA-insured programs and a proprietary product for jumbo reverse mortgages called the Cash Account Advantage, the company said. This product is structured to include all the same safeguards as an FHA-insured HECM but does not have a maximum lending limit, Bart Johnson, president of Financial Freedom, said in an e-mail statement sent to MortgageDaily.com. Financial Freedom’s wholesale division serves both correspondent lenders and brokers, Johnson said. And the company Web site said it originates reverse mortgages in all 50 states. In response to the increased popularity in reverse mortgages, “HUD provided the model for the industry and we are pleased to see that the private sector is getting more involved in providing these valuable products.” a HUD spokesman told MortgageDaily.com. |
