Reverse Mortgage Guide

Clearly reverse mortgages are changing the lives of seniors all across this country. The numbers tell a rather compelling story. Of all the reverse mortgages that have closed since 1990 (the year these loans started to close), Ninety -two percent have closed since 2000. Sixty percent of all these loans have closed in the last 28 months. These are astounding numbers. There have been about 394,000 reverse loans that have closed.

While Wall Street has its proverbial head buried in the sand, other institutions, with strong balanced sheets, are moving into this nascent industry.

___Genworth has purchased Liberty Reverse Mortgage;

___Metlife Bank is in the process of purchasing Everbank (which purchased Bank of New York’s reverse mortgage platform);

___Generation Mortgage, funded by the Guggenheim family, purchased two regional originators;

___Bank of America purchased Seattle Mortgage; and,

___KFC Bank, a Belgian Bank purchased World Alliance.

While the FHA Modernization Bill languishes in conference committee, the needs of our seniors are being ignored. This bill, among other things, will lower closing costs by capping the origination fee. AARP in their seminal study of the reverse mortgage industry, concluded that the number one impediment to the growth of the industry is the high costs to obtain same.

An amendment may be added to the bill that would increase the maximum claim amount to $550,000. This could mean that our elders who live in high costs areas, would be able to tap into more of their equity. The origination fee would be capped at $6000. (If there was no cap, the origination fee would be $11,0000

Enough of the rhetoric. Our seniors need action. And they need our protection. Call your Senator and Congressperson to demand that they vote on this bill today. A list of congressional email addresses and phone numbers can be found at: USA.gov.

Attorney Dennis Haber is the author of the just-published, ground-breaking book, Piggy Bank Your Home: Tap Into The Power Of A Reverse Mortgage.

This entry was posted on Wednesday, April 23rd, 2008 at 12:07 am 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.