1st Reverse Brings Jumbo Reverse Mortgages Back To Market

March 24th, 2009 | by John Yedinak Published in 1st Reverse, Jumbo Products, News, Reverse Mortgage | 21 Comments

1st Reverse Financial Services announced yesterday that it will start taking applications for its new jumbo reverse mortgage product starting March 25, 2009. The FLEX-XL™ will initially be available to retail customers and a select group of correspondent before it’s opened up to everyone said President Ralph E. Rosynek.

The FLEX-XL is an adjustable rate LIBOR based product that can be used to purchase or refinance a borrowers home said . Counseling is required and will be conducted by the IAMP-MEF (Illinois Association of Mortgage Professionals – Mortgage Education Foundation).

When RMD spoke with Rosynek, he said the FLEX-XL will be more conservative than some of the past jumbo products and isn’t meant to compete with the new higher HECM loan limits. “The product was designed to meet the needs of high value properties in excess of $1.5MM which the current HECM limits do not address,” said Rosynek.

According to a company statement, younger ages can expect to see LTV ranges of 15 to 20% and older borrowers can see 30 to 35%. The company is still working out the final details but will have a calculator to run scenarios soon.

Rosynek said its parent company, Wilimington Savings Fund Society will hold the jumbo loans on its balance sheet with hopes of eventually selling them to the secondary market. “Our parent WSFS Bank, FSB, continues to support our growth in the marketplace and the strength of WSFS’s balance sheet affords 1^st Reverse the opportunity to assist an even larger market of senior’s in their desire to remain in their homes,” said Rosynek.

During the initial roll out, the FLEX-XL will be available in 28 states through current retail and wholesale/correspondent channels. For more information check out the link below.

1st Reverse Financial Services

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Reversemaniac

15-35% LTV, I can’t see how this would make more sense than a HECM……although this may be a sign of increased liquidity in the secondary. I here MetLife is coming out with their Jumbo in Q2 or Q3…
http://reversemortgagedaily.com admin

I agree it’s a good sign, any product that is rolled out will be conservative to start but if the economy improves maybe it will get more competitive.
Reversemaniac

I was surprised when they said Q2 and Q3, this was before the new HECM limits were announced, that may have been a factor as well.
http://www.hudreversemortgage.us Mark Draper

I am just happy that someone is trying to get somthing moving. But on those % rates I agree with the reversemaniac. I would rather do a HECM with the new lending limits. I have a client with a value of $1.350MM getting $475k after closing costs, he is 83. So if its not going above and beyond the new limit then why do it. Now if they rolled out a program for Co-ops I would be swinging from the rafters.
http://www.reversemortgagehomepage.com Jerry Wagner

The last thing the industry needs is WSFS back in the proprietary reverse mortgage space. Aren’t there any other old hands reading RMD?
http://www.SuperJumboReverseMortgage.com Raymond

I went to 1st Reverse’s website, to read more about the offering, and it’s not mentioned anywhere on their website. When the “Reverse Mortgage Product Choices” button is selected, the next screen says “The information for this page is being updated. Please check back soon.”
James A. Nelson

At least it’s a sign that liquidity is perhaps returning to the RM marketplace. I would think competition would motivate others. I do agree it’s disappointing to not have access to complete information when programs are announced. I checked the website, too: I also called for Jerry and his Son, Andrew, but was referred to voicemail. Curious if one of the 28 States is Hawaii–have a client with
a 2.3 million dollar home, 475,00 debt. FHA HECM won’t work. Someday something will, I reassure them.
Treverse

In response to reversemaniac this is no sign of increased liquidity in the secondary market. They are holding these on their own balance sheet hoping to be able to sell them at a later date. The key word here is HOPING!
If there was a secondary market Metlife would not be pulling back.
Also there is no mention of the margin. I don’t see anything so great about it. It seems like the 1.5 MM
value is a little low. At the low end of 15% LTV it would have to be more like a 3MM home value.
James A. Nelson

If not liquidity, Treverse, then perhaps foresight.
Perhaps one should wait until all the details are known.
Treverse

James,I understand what you are saying but in this economy foresight is more like risk taking. But if WSFS has deep pockets and can afford to hold these on their balance sheets I wish them luck!
I just wonder why Metlife and the larger banks do not have the same foresight.
I do agree that when an announcement is being made all the facts should be presented and not be put out half baked.
KidReverse

It seems to me that this is an attempt to increase their correspondent base more than anything. I doubt too many will actually be sold, however it is nice to see a jumbo poduct once again. After all, everything has to start somewhere. Signs of life are good.
duhh!!!

re read the third paragraph and revise your comments DUHHH!!!!!
duhh!!!

that seems to be a common malady that affects application takers. They dont read and comprehend
James A. Nelson

Mr. Andrew Rosynek returned my call and said, yes, Hawaii is one of the 28 States in their Jumbo program. Unfortunately, with the younger partner’s birthdate of 04/10/1943 and a house value of 3.4 million (which a former jumbo lender cut to 2.3 million just prior to ceasing their program and leaving us out in the cold) and a mortgage debt of $475,000, the homeowners would have to bring approximately $150,000 to the table. I’m pretty
ignorant about anything but the FHA HECM so I can’t comment other than to say their program won’t work for my client. Mr. Rosyne was very cordial.
Reversemaniac

Treverse -

“may be a sign of increased liquidity”,Key word being “may”. Learn to read buddy.

RRRRRRMAniac!
Treverse

Mr. Nelson

I’m not going to get into a war of words with you but no need for insults. I read pretty well! Maybe you should follow your own advice because I do not see the word “may” in your comments.
I’m all for debate but let’s keep it business not personal. Have a great day!
Treverse

I did a little research on WSFS:
Looks like our (taxpayer) money might be funding this new proprietary product.

WSFS Financial Corporation
Wilmington, DE
Total TARP funds received: $52,625,000
$52,625,000 on Jan. 23, 2009
Wilmington Savings Fund Society, FSB

WILMINGTON — The economy’s fourth-quarter freeze-up knocked Wilmington Trust’s earnings $23.6 million into the red for 2008, fueled by a $68.5 million quarterly loss, the company reported Friday.
The bank cut its regular quarterly cash dividend to 17 cents a share, half of what it paid in the third quarter.
Driven by sharp declines in the value of its securities portfolio and an uptick in the amount of cash set aside to cover bad loans, the bank posted a net loss of $68.5 million, or $1.02 a share, in the fourth quarter. For the full year, losses were 36 cents a share.
Back in the fourth quarter of 2007, the bank posted a profit of $44 million, or 65 cents per share
http://reversemortgagedaily.com admin

Treverse,

Nice find! At least the money is being used to lend =)
Cab

Here is my quote from 1st Reverse on a 3M property for a 70-year old: 16% LTV = 480K. Origination fee $37,500 + “other closing costs” $10,000 = a whopping $47,500. Bottom line is $432,500 cash at closing. Interest rate is LIBOR+5.5 = 6.0225%. Estimated closing date is 5/26 (60 days).

Considering that an FHA product yields about $405,000 with much more reasonable fees, I don’t expect WSFS to run out of money any time soon. Last year, the cost for a much higher LTV was about $25,000. I do fear that many seniors will be sold these fees as if they were standard.
Treverse

Cab,

Thanks for the info! You forgot to mention that the Libor is an adjustable rate. The Libor average for the past fifteen years is 4.24%. So if it gets back to that rate the customer will be paying almost 10%. That 3MM will erode pretty fast at that compound rate.
http://www.SuperJumboReverseMortgage.com Raymond

It’s been a dozen days since seombody “heard” 1st Reverse is offering a Jumbo program, but I haven’t been able to confirm it. They still don’t mention the program anywhere on their website and the “Reverse Mortgage Product Choices” section of their website still says “The information for this page is being updated. Please check back soon.”

What do they mean by “soon”? I thought 12 days would adequate but apparently not.

1st Reverse Brings Jumbo Reverse Mortgages Back To Market

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