Comments on: When Is An “Origination Fee” Not An “Origination Fee?” http://www.bestreversemortgage.com/reverse-mortgage/when-is-an-origination-fee-not-an-origination-fee/ The Unofficial Guide to Reverse Mortgages Sun, 07 Sep 2008 15:07:36 +0000 http://wordpress.org/?v=2.6 By: Joe Miramonti http://www.bestreversemortgage.com/reverse-mortgage/when-is-an-origination-fee-not-an-origination-fee/#comment-1942 Joe Miramonti Tue, 08 Jan 2008 14:13:59 +0000 http://www.bestreversemortgage.com/reverse-mortgage/when-is-an-origination-fee-not-an-origination-fee/#comment-1942 Peter, Totally agree with your comments. Also, the pages devoted to discussion of the orginiation fees for reverses are very insightful and helpful. As a broker, getting to a fair value "pricing" policy for doing these loans is really important. I want to beleive that when I charge a client for my time and expertise that they are getting that fair value. If the project is hard and consumes time then it should cost more that if it is easy and consumes less. I struggle with a one size fits all pricing policy for reverses that is just tied to what the FHA says is OK. I'd love to hear your thoughts on this. Thanks for clarifying the terms and getting into the details on "origination fees". If you have a better term or set of terminology for this fee structure, I'd love to hear it. Welcome your comments. Peter,

Totally agree with your comments. Also, the pages devoted to discussion of the orginiation fees for reverses are very insightful and helpful. As a broker, getting to a fair value “pricing” policy for doing these loans is really important. I want to beleive that when I charge a client for my time and expertise that they are getting that fair value. If the project is hard and consumes time then it should cost more that if it is easy and consumes less. I struggle with a one size fits all pricing policy for reverses that is just tied to what the FHA says is OK. I’d love to hear your thoughts on this. Thanks for clarifying the terms and getting into the details on “origination fees”. If you have a better term or set of terminology for this fee structure, I’d love to hear it. Welcome your comments.

]]> By: Philip Vernot http://www.bestreversemortgage.com/reverse-mortgage/when-is-an-origination-fee-not-an-origination-fee/#comment-1940 Philip Vernot Tue, 08 Jan 2008 13:32:30 +0000 http://www.bestreversemortgage.com/reverse-mortgage/when-is-an-origination-fee-not-an-origination-fee/#comment-1940 Yes, the costs to implement a reverse are high in relation to a conventional mortgage but when you compare the cost against how and when the loan is repaid and how a line of credit works with a reverse I think the fees are reasonable. Yes, the costs to implement a reverse are high in relation to a conventional mortgage but when you compare the cost against how and when the loan is repaid and how a line of credit works with a reverse I think the fees are reasonable.

]]> By: Peter G. Miller http://www.bestreversemortgage.com/reverse-mortgage/when-is-an-origination-fee-not-an-origination-fee/#comment-1938 Peter G. Miller Tue, 08 Jan 2008 06:04:18 +0000 http://www.bestreversemortgage.com/reverse-mortgage/when-is-an-origination-fee-not-an-origination-fee/#comment-1938 John & Greg -- You are correct. I was responding to the literal language found in the original post -- I should have revised the example but did not. My fault. For a fuller discussion of origination fees, press <a href="http://www.bestreversemortgage.com/reverse-mortgage/reverse-mortgage-origination-fees-suitability/" rel="nofollow">here</a>. John & Greg –

You are correct. I was responding to the literal language found in the original post — I should have revised the example but did not. My fault.

For a fuller discussion of origination fees, press here.

]]> By: Greg King http://www.bestreversemortgage.com/reverse-mortgage/when-is-an-origination-fee-not-an-origination-fee/#comment-1935 Greg King Mon, 07 Jan 2008 22:51:16 +0000 http://www.bestreversemortgage.com/reverse-mortgage/when-is-an-origination-fee-not-an-origination-fee/#comment-1935 I agree in concept to what you are saying but you have the fee based upon "2% of home value " is not correct. The 2% is charged on PLEDGED value, which is total different. Every county has a seperate "lending limit" which is used to factor in the pledged value. You may have a home that is worth $ 1,000,000, but have a lending pledged value on that home of only $200,000. So your origination fee would only be $ 4,000....a far cry from home value. I agree in concept to what you are saying but you have the fee based upon “2% of home value ” is not correct. The 2% is charged on PLEDGED value, which is total different. Every county has a seperate “lending limit” which is used to factor in the pledged value. You may have a home that is worth $ 1,000,000, but have a lending pledged value on that home of only $200,000. So your origination fee would only be $ 4,000….a far cry from home value.

]]> By: John Pecha http://www.bestreversemortgage.com/reverse-mortgage/when-is-an-origination-fee-not-an-origination-fee/#comment-1934 John Pecha Mon, 07 Jan 2008 22:10:17 +0000 http://www.bestreversemortgage.com/reverse-mortgage/when-is-an-origination-fee-not-an-origination-fee/#comment-1934 Peter, Your paragraph utilizing an example is incorrect in it's assumptions. In the example, you cite that the orgination is based on the homes value. That is incorrect. The origination fee is based on the lower amount of the 203b county lending limit or the home's value. You may find the 203b county lending limits on the FHA's website to learn more. So using your $500,000 example and we assume this house is in a county with the highest lending limit- $362,790 then the origination would be 2% of $362,790 and NOT 2% of $500,000. In addition, the number of counties in the US that are at or even near this lending limit is very, very small. For more information about Reverse Mortgages, I would check out www.reversemortgage.org. Peter,

Your paragraph utilizing an example is incorrect in it’s assumptions. In the example, you cite that the orgination is based on the homes value. That is incorrect. The origination fee is based on the lower amount of the 203b county lending limit or the home’s value. You may find the 203b county lending limits on the FHA’s website to learn more.

So using your $500,000 example and we assume this house is in a county with the highest lending limit- $362,790 then the origination would be 2% of $362,790 and NOT 2% of $500,000. In addition, the number of counties in the US that are at or even near this lending limit is very, very small.

For more information about Reverse Mortgages, I would check out http://www.reversemortgage.org.

]]>