It sounds good BUT, A) Will this push people towards fixed-rate loans when they should be taking adjustables? B) Will this confuse our clients who will not understand why their loan has $15,000 more in closing costs than their friends? and C) What will happen if the secondary market shifts considerably and B of A has to start charging the MIP again, and noone wants to pay it?

Reversing the slide is not the issue. Lessening the slide is.

Dave Bancroft is right. For far too long this industry has had an ancient old banker attitude towards innovation. Why it takes a crisis to change that mentality is ridiculous.

All of us who have been ACTIVE in this business for at least 6 months have come across resistance to HECMs based on upfront costs. Proprietary reverse mortgage lenders understood that principal immediately upon offering their products. While most of us are pleased with these changes, why weren't they initiated two decades ago?

I hope these changes do not drown out the cries for a HECM II. Lower costs at lower interest rates would be very helpful. There needs to be both adjustable as well as fixed rate HECM IIs. Why not offer several HECMs at various PLFs so that the MIP could be charged based on the PLFs offered? Yes, that would result in risk based pricing. Maybe the number of participating seniors would not double but that number would certainly rise and perhaps projected positive credit subsidies would be reduced as a result.

wealthone,

What about the ongoing MIP? PenFed is paying that on their adjustable rate HECM.

nornocyte,

If you have adequate comps vindicating a higher value, have your originator submit a challenge through the lender. I did for a customer (with better and more timely comps) and on an AMC appraisal, the appraiser amended his estimate of value, increasing it by about 5%. But if you do not have the comps unless there is a math or other significant error, little can be done. But if you have adequate documentation (that is generally the challenge) and your originator will not provide it to the appraiser through the lender, find a new originator. If the appraiser ignores the submission, work with the originator to see if there is something else which can be done; usually there is not.

So as to reduce any false expectations, my experience with an increase in the estimate of value with an AMC appraisal is quite rare.

I think it's a kick in the pants to the BoA retail originators who do not have access to this product.

retail isn't doing this according to source there

It depends on the solution you're seeking. What's your primary objective? Are you interested in receiving a monthly check? Or does a Credit Line make more sense for your situation. Or is your goal to eliminate your monthly mortgage payment? Or to receive the absolute lowest fees possible?

It's important to understand the solution you're seeking prior to recommending the best reverse mortgage program.

It depends on the solution you’re seeking. What’s your primary objective? Are you interested in receiving a monthly check? Or does a Credit Line make more sense for your situation. Or is your goal to eliminate your monthly mortgage payment? Or to receive the absolute lowest fees possible?rnrnIt’s important to understand the solution you’re seeking prior to recommending the best reverse mortgage program.