Reverse Mortgage Lenders Waive Some Fees

Several reverse mortgage lenders recently said they are waiving fees for origination and servicing on Home Equity Conversion Mortgages (HECMs). The changes in these reverse loan programs are aimed at reducing costs and giving borrowers more cash.

Fixed Rate Reverse Mortgages

Among the reverse mortgage lenders who have announced changes in HECMs are:

• Financial Freedom, which says waiving the origination and servicing fees on fixed-rate loans allows seniors to save about $3,500 to $10,000 in reverse mortgage costs. The company also lowered the interest rate margin on the Financial Freedom HECM LIBOR to 175 basis points from 250 basis points. The company said in a statement that reducing the margin could give reverse loan borrowers an additional $10,000.
• Generation Mortgage, which is waiving the fees on a new fixed-rate HECM. “We are in the business of helping clients put as much money as possible back into their pockets, and the best way to do that is by regularly evaluating how we can maximize each client’s reverse mortgage,” said Scott Peters, president and CEO. “This attractive option is a function of positive market conditions.”
• Pentagon Federal Credit Union and Sun West Mortgage have a joint initiative that involves waiving the upfront origination fee, which is 2% of the adjusted property value, and its $35 monthly servicing fee. The HECM is being offered only in Maryland, Virginia, and Washington, D.C., but should eventually be available nationwide.
• MetLife Bank NA, which says customers who choose the fixed-rate loan can take advantage of the reduced fees and put more money in their pockets. The bank plans to continue offering variable rates and lines of credit to people interested in such deals.

Reverse Loan Closing Costs

Although the reverse mortgage companies are waiving origination and service fees, other closing costs still apply. Among the closing costs you can expect to pay on a reverse home mortgage are fees for title search, insurance, appraisals, and recording fees.

This entry was posted on Thursday, April 15th, 2010 at 5:54 pm and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.