Unfortunately our forecast came through. The average HECM borrower will have benefits that are $6,000 lower today compared to last week.  .

This week, all Treasury-based HECM’s with a margin of +154 or less will pay the HECM maximum benefits. Ditto for LIBOR-based HECM’s with margins of +100 or less. Using these margins, the initial note rate on a LIBOR HECM would be 239 bp more than that on a Treasury HECM. The LIBOR yield curve is much flatter than that of CMT’s. The rates as of 10/21/08 are:

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