Comments on: Reverse Mortgage: CMT or LIBOR? http://reversemortgagedaily.com/2008/04/15/reverse-mortgage-cmt-or-libor/ Reverse Mortgage News and Information Tue, 14 Oct 2008 20:56:44 +0000 http://wordpress.org/?v=2.3.1 By: Michigan Residential Lending http://reversemortgagedaily.com/2008/04/15/reverse-mortgage-cmt-or-libor/#comment-3949 Michigan Residential Lending Thu, 17 Apr 2008 13:52:27 +0000 http://reversemortgagedaily.com/2008/04/15/reverse-mortgage-cmt-or-libor/#comment-3949 I agree with what was said above. Comparing a Libor 150 to a CMT 150 really is like comparing a Ferrari to a Fiat. Amanda <3 I agree with what was said above. Comparing a Libor 150 to a CMT 150 really is like comparing a Ferrari to a Fiat.

Amanda <3

]]> By: GM http://reversemortgagedaily.com/2008/04/15/reverse-mortgage-cmt-or-libor/#comment-3943 GM Wed, 16 Apr 2008 16:07:51 +0000 http://reversemortgagedaily.com/2008/04/15/reverse-mortgage-cmt-or-libor/#comment-3943 To answer your question in the first line of your post, they pulled back pricing because the yield is too low and is forcasted to remain low for the near future. In order to sustain pricing, they need to raise the yield (AKA margin). Moving on, it's not necessarily what we want to originate, it's what is being funded by our banks that leaves us with a small choice. LIBOR was supposed to be the "wall street friendly" product since investors borrow at LIBOR and can calculate/forcast their spread and margin easier. That's changed in the last few months and the remaining banks funding LIBOR products will need to follow suit with the investors need and change back to CMT: otherwise they'll get stuck with a portfolio of loans that no one will buy. ***Since the difference is nominal between the two products, it shouldn't matter what is sold. We need to remain profitable as a company in order to continue providing this program and our services to the seniors. Whatever the investor wants and is willing to pay the most for, is what they'll get. To answer your question in the first line of your post, they pulled back pricing because the yield is too low and is forcasted to remain low for the near future. In order to sustain pricing, they need to raise the yield (AKA margin).

Moving on, it’s not necessarily what we want to originate, it’s what is being funded by our banks that leaves us with a small choice. LIBOR was supposed to be the “wall street friendly” product since investors borrow at LIBOR and can calculate/forcast their spread and margin easier. That’s changed in the last few months and the remaining banks funding LIBOR products will need to follow suit with the investors need and change back to CMT: otherwise they’ll get stuck with a portfolio of loans that no one will buy.

***Since the difference is nominal between the two products, it shouldn’t matter what is sold. We need to remain profitable as a company in order to continue providing this program and our services to the seniors. Whatever the investor wants and is willing to pay the most for, is what they’ll get.

]]> By: admin http://reversemortgagedaily.com/2008/04/15/reverse-mortgage-cmt-or-libor/#comment-3942 admin Wed, 16 Apr 2008 15:09:06 +0000 http://reversemortgagedaily.com/2008/04/15/reverse-mortgage-cmt-or-libor/#comment-3942 Both of you're right, I posted this more to see how many people have switched to originating LIBOR products. I keep hearing that the CMT products will dissapear soon but I'm not so sure that will happen. Both of you’re right, I posted this more to see how many people have switched to originating LIBOR products. I keep hearing that the CMT products will dissapear soon but I’m not so sure that will happen.

]]> By: MK http://reversemortgagedaily.com/2008/04/15/reverse-mortgage-cmt-or-libor/#comment-3941 MK Wed, 16 Apr 2008 14:51:23 +0000 http://reversemortgagedaily.com/2008/04/15/reverse-mortgage-cmt-or-libor/#comment-3941 I must say that I agree with the comment above. First of all, comparing a Libor 150 to a CMT 150 is like comparing a Ferrari to a Fiat. The Libor 150 is way more equivalent to a CMT 200 than a CMT 150 which pays the customer more and the broker more than the Libor the way rates are at this time. I must say that I agree with the comment above. First of all, comparing a Libor 150 to a CMT 150 is like comparing a Ferrari to a Fiat. The Libor 150 is way more equivalent to a CMT 200 than a CMT 150 which pays the customer more and the broker more than the Libor the way rates are at this time.

]]> By: SA http://reversemortgagedaily.com/2008/04/15/reverse-mortgage-cmt-or-libor/#comment-3940 SA Wed, 16 Apr 2008 14:14:17 +0000 http://reversemortgagedaily.com/2008/04/15/reverse-mortgage-cmt-or-libor/#comment-3940 You really should do a little more research before publishing a comparison. 50bs for CMT 150? Also you must take into consideration how the borrower is taking their money and interest that is charged to the balance over time. You really should do a little more research before publishing a comparison. 50bs for CMT 150?

Also you must take into consideration how the borrower is taking their money and interest that is charged to the balance over time.

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