Reverse mortgage lender gets tax break, fights allegations,
A reverse mortgage lender has met one of its growth benchmarks by creating 100 jobs in just four months, under a deal with the state for $3.5 million in tax benefits.
But even as Melville, N.Y.-based Vertical Lend Inc. continues its growth in Troy and plans to add 60 jobs in January, the company grapples with allegations of deceptive business practices and use of unlicensed loan brokers in Massachusetts.
Vertical Lend, licensed to operate in 33 states and in the process of changing its name to World Alliance Financial, obtained $3.5 million in tax incentives in April from the Michigan Economic Growth Authority to locate a national office in Troy and create hundreds of jobs.
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Full post here Reverse Mortgage Loan Blog
Written by News & Feeds on November 7th, 2007 with no comments.
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Seek unbiased help if considering reverse mortgage option,
Many people aged 62 or older are “house-rich and cash-poor.” They’re free of house debt but their income is limited. A reverse mortgage may allow some to take advantage of their house as an asset and convert it to income.
A reverse mortgage is a loan, where the lender pays you - in a lump sum, a monthly advance, a line of credit, or all three - while you continue to live in your home. To qualify you must own your home and all owners of the home must be 62 years of age or older.
The amount you can borrow is generally based on your age, the home’s value and the interest rate the lender is charging. Funds received can be used for any purpose.
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Full post here Reverse Mortgage Loan Blog
Written by News & Feeds on November 7th, 2007 with no comments.
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India: Reverse Mortgage Loan getting good response,
MUMBAI: Traditionally in India retirement from active service is usually considered to be the end of active life, and sooner or later a retiree becomes entirely dependent on his or her children. A promise in the current year’s budget by Finance Minister P Chidambaram of introducing reverse mortgage products is now fast liberating the senior citizens from that conservative parental mindset, putting him at a par with his European or American counterparts.
Reverse Mortgage Loan (RML) is essentially for the benefit of senior citizens, above the age of 60 years, against the security of their self-acquired, self-occupied houses. The loan is usually paid off by the legal heir of the borrower or is recovered by the sale of the house. According to trends being seen by a few leading banks which have already introduced RML product, they are receiving an overwhelming response from senior citizens.
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Full post here Reverse Mortgage Loan Blog
Written by News & Feeds on November 7th, 2007 with no comments.
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Letter: Be wary of reverse mortgages,
If the government is willing to insure and ensure any reverse mortgage loan with a financial mortgage lender will be paid off so that elderly, needy folks can remain in their homes, why do we need a third party in on the deal? Specifically, reverse mortgage firms that are not the financial backers. Those firms send you their pretty brochures and tempt you with what you can do with all that equity you can receive in your house - take a trip, buy that car you’ve always wanted , and no questions asked.
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Full post here Reverse Mortgage Loan Blog
Written by News & Feeds on November 7th, 2007 with no comments.
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HECM Market Comparison 10/31/2007 vs 10/31/2006,
Much has changed over the past year in the HECM loan market: Florida has taken over from California as the reverse mortgage activity “hot spot” in the U.S.; new products like the HECM 100 and HECM 125 have emerged, and the overall volume of HECM loans has increased substantially. We thought it would be interesting to track HECM market changes in each of the locations that HUD processes home equity conversion mortgages.
The following table shows, for each location, the absolute change in HECM volume and the change in market share. Time periods used for comparison are the 12-month periods ended 10/31/07 and 10/31/06. Most of the significant changes reflect the emergence of Florida HECM activity and the corresponding declines in California HECM activity that we’ve noted before. But some other interesting points emerge as well:
Boston, New York and Philadelphia are all in the Top 10 with Philadelphia showing particularly strong growth.
The highest growth rate in the nation (254.9%) is in Jackson, MS and is likely related to rebuilding efforts following the Katrina disaster.
56 of 81 locations had HECM growth rates higher than the national average (33.5%) while growth rates in 25 markets were lower than the average.
14 Locations had growth rates over 100%.
10 locations (including all six California locations) had negative growth rates
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Full post here Reverse Mortgage Information
Written by News & Feeds on November 7th, 2007 with no comments.
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HECM Growth By State,
Our prior use of a “heat map” showing Home Equity Conversion Mortgage Growth in U.S. States was well received by visitors so we thought we’d make it a monthly feature using data from HUD’s monthly HECM activity reports.
The map below is based on percentage changes HECM growth rates for the 12-month period ended 10/31/07 compared with the 12-month period ended 10/31/06. RED, ORANGE, and YELLOW states all had HECM growth rates exceeding the national average while BLUE and GREEN had growth below the national average. More detailed color code descriptions are included below the map:
RED: These are the “hottest” growth areas with year-over-year growth in excess of 100%. Florida, for example, saw 17,481 HECM endorsements from 11/1/06 through 10/31/07 compared to 8,577 HECMs in the prior 12-month period (ended 10/31/06) - a growth rate of 103.8%
ORANGE: These states saw HECM activity grow at rates of 50% to 99.99%
YELLOW: These states grew at rates of 33.5% to 49.99%. The average rate of growth for all states for this time period was 33.5%.
GREEN: These states had positive growth, but their growth rates were below the national average (33.5%).
BLUE: These states had negative growth rates. Most notable in this category is California where the number of HECMs endorsed dropped 18.3% from 23,632 to 19,304.
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Full post here Reverse Mortgage Information
Written by News & Feeds on November 7th, 2007 with no comments.
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HECM Activity Shows Moderate Rebound But Still Disappoints,
October HECM activity rebounded somewhat from the sharp falloff seen in September, but remained well below the 12-month average. According to HECM MIC reports recently issued by HUD, 8,417 HECMs were endorsed in October, a 9% increase from September’s total of 7,695. But the October total fell about 6 percent under the 12-month moving average of 8,938 monthly HECM endorsements and was, surprisingly, about four percent lower than the 8,789 HECM’s endorsed one year ago in October 2006.
October’s totals, in fact, were the eighth lowest out of the last twelve months:
| Month |
HECM Endorsements |
Rank |
| Nov 2006 |
7,478 |
12 |
| Dec 2006 |
7,760 |
10 |
| Jan 2007 |
8,824 |
7 |
| Feb 2007 |
9,349 |
4 |
| Mar 2007 |
10,888 |
1 |
| Apr 2007 |
8,041 |
9 |
| May 2007 |
10,409 |
3 |
| Jun 2007 |
8,925 |
6 |
| Jul 2007 |
10,462 |
2 |
| Aug 2007 |
9,006 |
5 |
| Sep 2007 |
7,695 |
11 |
| Oct 2007 |
8,417 |
8 |
Clearly, fall out from the mortgage/housing crisis and the associated drop in home values continues to negatively impact reverse mortgages. To see more HECM activity statistics or do your own analysis of the numbers, visit our free HECM Loan Data tool.
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Full post here Reverse Mortgage Information
Written by News & Feeds on November 7th, 2007 with no comments.
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Tips For Avoiding Reverse Mortgage Scams,
We came across a truly useful book the other day: Scam Proof Your Life (377 Smart Ways to Protect You & your Family From Ripoffs, Bogus Deals & Other Consumer Headaches). The book is written by Sid Kirchheimer, “AARP’S Scam Alert Expert” and contains a wealth of practical tips and advice to use in protecting against all types of financial mischief from high-tech identity theft to avoiding used car sales scams.
Our initial interest in picking up the book was to see the advice offered for avoiding reverse mortgage scams. Given the authors AARP connection (even highlighted on the cover) we surely thought a chapter (at least a few pages) would be devoted to dangers in the fast-growing reverse mortgage sector. On this point we were disappointed. Not a word about reverse mortgages or reverse mortgage scams.
A chapter is devoted to “Homes”, but it deals mostly with home purchase mortgages and home improvements. Quite surprising that a book about consumer scams carrying the AARP logo on its cover does not mention reverse mortgages.
Still, Scam Proof is a worthwhile read. One section that does pertain to reverse mortgage borrowers is a concise summary of current research on reasons why seniors may be more susceptible to certain fraud schemes. The research is insightful and worth summarizing and sharing here:
According to Researchers: “(T)he aging brain is more likely to remember false statements as true if they sound familiar or are repeated often. The aging brain is also less likely to recall what was originally said.”
Fix: Get things in writing - quotes, guarantees, your own notes of what was discussed. Having written documentation helps ensure you recollect things accurately.
According to Researchers: “(A)s the day progresses, older individuals grow less capable of processing fine-print details such as contract terms - especially under act-now pressure…There is not much difference in this capacity between older and younger people in the morning…but there is a noticeable decline among older people after about 2 p.m.”
Fix: Avoid afternoon and evening sessions to review/sign important documents. Insist on morning sessions when researchers say you are at your peak.
According to Researchers: “Seniors are no more trusting than anyone else…But they tend to be more patriotic and more religious. and that translates to increased vulnerability to charity and other scams that play on these emotions.”
Fix: Recognize your susceptibility on this point and pay particular attention to pitches that play upon patriotism, government connection, or charity. An example from the realm of reverse mortgages: while it’s good to know that HECM reverse mortgages are “federally insured”, this fact should not have a major bearing on whether a HECM makes financial sense for you. Nor should the “government” connection be misconstrued as an endorsement or evidence that HECM reverse mortgages must be a good for seniors.
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Full post here Reverse Mortgage Information
Written by News & Feeds on November 7th, 2007 with no comments.
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Interesting Info About Financial Freedom Reverse Mortgage Operations,
We came across a recent press release that included a few interesting tidbits about the Financial Freedom reverse mortgage operations, the recognized industry leader (at least in terms of loan volume):
As of June 30, 2007, Financial Freedom serviced a portfolio of 131,315 loans with an outstanding principal balance of nearly $16 billion, representing a 41% growth over the prior year. Financial Freedom originates the Home Equity Conversion Mortgage (HECM), the Fannie Mae Home Keeper, as well as its own proprietary Cash Account Advantage products. The company sources 75% of its production through its wholesale, 25% through retail and 5%-10% through its correspondent channels. Financial Freedom expects portfolio volumes to reach 145,000 loans by year-end 2007.
The press release reported on a recent rating affirmation by Fitch of Financial Freedom’s “primary specialty reverse mortgage servicing” operations. These are the operations that perform “backroom” duties like maintaining loan records, processing payments, and collecting on reverse mortgages upon termination.
The Fitch rating isn’t so much for the general publics benefit as it is for buyers of securities made up of individual reverse mortgages packaged together for large investors. These investors want assurance from an independent reviewer like Fitch that the loans they are investing in will be processed, monitored and, ultimately, paid back to them.
Anyway, we thought the information accompanying the rating report was noteworthy. We were also a little surprised the rating wasn’t better - given Financial Freedom’s leadership position in the reverse mortgage industry. According to Fitch’s rating scale, Financial Freedom’s RPS3+ rating is good, but middle of the road:
Fitch rates residential mortgage primary, master, and special servicers on a scale of 1 to 5, with 1 being the highest rating. Within some of these rating levels, Fitch further differentiates ratings by plus (+) and minus (-) as well as the flat rating.
It looks to be a case where sub prime mortgage problems of the parent company (Indy Mac) are negatively impacting the reverse mortgage servicing rating.
The rating action reflects Financial Freedom’s experienced management team, proficiency in servicing reverse mortgages, and capable loan servicing systems. Financial Freedom is a wholly owned subsidiary of Indymac Bank F.S.B. whose long term debt is rated ‘BBB-’, with a Rating Watch Negative, by Fitch
Related posts
,
Full post here Reverse Mortgage Information
Written by News & Feeds on November 7th, 2007 with no comments.
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HECM Market Comparison 10/31/2007 vs 10/31/2006,
Much has changed over the past year in the HECM loan market: Florida has taken over from California as the reverse mortgage activity “hot spot” in the U.S.; new products like the HECM 100 and HECM 125 have emerged, and the overall volume of HECM loans has increased substantially. We thought it would be interesting to track HECM market changes in each of the locations that HUD processes home equity conversion mortgages.
The following table shows, for each location, the absolute change in HECM volume and the change in market share. Time periods used for comparison are the 12-month periods ended 10/31/07 and 10/31/06. Most of the significant changes reflect the emergence of Florida HECM activity and the corresponding declines in California HECM activity that we’ve noted before. But some other interesting points emerge as well:
Boston, New York and Philadelphia are all in the Top 10 with Philadelphia showing particularly strong growth.
The highest growth rate in the nation (254.9%) is in Jackson, MS and is likely related to rebuilding efforts following the Katrina disaster.
56 of 81 locations had HECM growth rates higher than the national average (33.5%) while growth rates in 25 markets were lower than the average.
14 Locations had growth rates over 100%.
10 locations (including all six California locations) had negative growth rates
Related posts
,
Full post here Reverse Mortgage Information
Written by News & Feeds on November 7th, 2007 with no comments.
Read more articles on .
