RMD has learned that VirtualBank Seniors Lending Group is getting back into the reverse mortgage business after it was shut down in late 2007.  Al Rodriguez is heading up the business as President and Dennis Loxton will be the National Sales Manager for wholesale.

Virtual Bank is accepting new broker applications effective immediately and plans to formally open for business nationwide in early March.

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Over the weekend the Wall Street Journal published the Case for Being Your Mom’s Banker where they discuss whether a reverse mortgage or a private mortgage between family is a better decision to help out your parents.

In respect to reverse mortgages, WSJ contributor Kelly Green writes:

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The US Department of Housing and Urban Development updated its Frequently Asked Questions (FAQ) document for the Real Estate Settlement Procedures Act (RESPA).

The updates address a range of topics ranging from Appraisal Management Companies to requiring verification of documents as a condition of issuing the new Good Faith Estimate.  

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Golden Gateway Financial recently announced that it achieved Diamond Certification from American Ratings Corporation.  The certification process rates companies by customer satisfaction research, credentials and business practices.

American Ratings Corporation interviewed a random sampling of the Oakland, CA based reverse mortgage lenders customers and polled them regarding their willingness to do business with the company again.

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He calls himself “The Mortgage Professor,” stemming from varying roles as a teacher at the University of Pennsylvania (finance) and as a professional in the home loan market for many years. So, when Jack Guttentag’s essay appeared recently in the Washington Post – disputing the often-made connection between reverse and subprime mortgages – readers took notice.

“For reasons not clear to me,” he writes in the essay, “reverse mortgages are being bad-mouthed by an unlikely source: consumer groups that are supposed to represent the interest of consumers in general, and seniors in particular.” The author continues: “What is not useful is needlessly and gratuitously fanning the flames of senior anxiety about losing their homes.” In sum, he adds: “The current state of the HECM market has no resemblance whatsoever to the conditions in the subprime market that led to disaster.”

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The Salt Lake City FBI and Utah Division of Real Estate named its top 5 Mortgage Scams for 2010 and reverse mortgages were included.

Michelle Pickens, special agent and mortgage fraud coordinator with the FBI told Dessert News that "Scam artists are always looking for new ways to reinvent the same crime.”  Pickens added, “The reverse mortgage scam is based off the ’straw buyer’ model where they use senior citizens … against their own mortgages."

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India’s Financial Chronicle is reporting that few banks and insurance companies have started offering the new reverse mortgage product which was recently updated to provide monthly payments for the remainder of the borrowers life.

It has been over three months since the new product was announced and yet the only companies who have signed up to offer it are the original companies (Central Bank of India and Star Union Dai-chi Life Insurance).

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