Financial Freedom Drops LIBOR Reverse Mortgages, Wall Street Stops Buying Jumbo Products
March 16th, 2008 | Published in Financial Freedom, Jumbo RM Products, News, Reverse Mortgage | 3 Comments
Late last week Financial Freedom announced that they were discontinuing their LIBOR 75 and 85 HECM products. According to the announcement, the elimination of the product stems from the latest liquidity problems in the secondary market which has widened spreads on Agency MBS in the past week.
If you’re confused as to why we are seeing this, join the club. For the past few months all wholesale lenders started offering LIBOR based products and some even discontinued offering CMT based HECMs. It will be interesting to see if other lenders follow suit this week or if it’s just something Financial Freedom is doing. Could this have something to do with the feds announcement of the new Term Securities Lending Facility (TSLF), which provides financial institutions with 28-day loans of Treasury securities?
I’ve also heard from several RMD readers that several large Wall Street players are no longer buying jumbo reverse mortgage production which has forced some wholesalers to eliminate their jumbo product(s). From my understanding the Wall Street players were the ones who wanted LIBOR based HECM products so maybe this is a sign that Wall Streets interest is slowing for reverse mortgage production. Not sure if this is the case yet, but I will be sure to keep you updated on what I’m hearing.
Technorati tags: Reverse Mortgage, Reverse Mortgage News, HECM, LIBOR, Wall Street, Financial Freedom
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May 6th, 2008 at 12:03 am (#)
[…] reverse mortgage became too severe for banks. Specialists in reverse mortgages such as Financial Freedom quietly pulled the plug on their jumbo reverse mortgages back in March to little fanfare at the time. More recently Bank of America, UBS and Credit Suisse […]
May 6th, 2008 at 10:08 pm (#)
[…] reverse mortgage became too severe for banks. Specialists in reverse mortgages such as Financial Freedom quietly pulled the plug on their jumbo reverse mortgages back in March to little fanfare at the time. More recently Bank of America, UBS and Credit Suisse […]
May 8th, 2008 at 11:03 pm (#)
[…] reverse mortgage became too severe for banks. Specialists in reverse mortgages such as Financial Freedom quietly pulled the plug on their jumbo reverse mortgages back in March to little fanfare at the time. More recently Bank of America, UBS and Credit Suisse […]