“Upon the recommendation of the senior management team, VirtualBank Seniors Lending Group has made the strategic decision to shift from a wholesale and retail reverse mortgage origination model to one focused solely on retail originations,” said the company.

“The wholesale management team has left VirtualBank Seniors Lending Group on extremely good terms and we look forward to working together with them in the future on various opportunities in both the forward and reverse mortgage areas.”

During our conversation, it’s clear the company felt the wholesale business has gotten extremely competitive in the last month and is part of the reason it decided to exit. With lenders releasing updated HECM products, dramatic pricing changes, and volume trending lower they weren’t sure there was a need for another wholesale lender in the marketplace.

VirtualBank originally entered the business in 2007 offering a suite of proprietary products to address the needs of borrowers who could benefit from a higher loan limit. However, as the secondary market fell apart so did Virtual Bank and it left the industry only five months later.

Virtual Bank is accepting new broker applications effective immediately and plans to formally open for business nationwide in early March.

Prior to shutting down, Virtual Bank offered a creative suite of products like the Mega Life, Life Plan, and Prime Life which were designed for borrowers who didn’t quite fit into the HECM program or the jumbo products in the marketplace.

While it’s doubtful the company will be offering the same type of products as before, we’re being told Virtual Bank is in the process of getting approved as a Ginnie Mae issuer.  However, its no secret that Ginnie Mae has a backlog of applications from reverse mortgage lenders and all we’ve been told is “We’re working through them as fast as we can”.

Assuming Virtual Bank is able to get approved to issue HMBS, they will have plenty of competition as execution on the secondary market continues to improve.  Last week SunWest and Reverseit pricing improved drastically and began paying over 2% in YSP to correspondents for fixed rate HECMs.

The second group were the folks at Virtual Bank Seniors Group (VB).  The Virtual Bank scenario is summed up as:  Start.  Stop.  Start.  Stop.  RMD has posted various articles on VB’s product when they were released and then pulled back and then re-released under similar guidelines but with higher margins and fee differences.  Our company spent the time to complete their application and weeks later when we found a contact who took our call, that person told us that they had decided to quietly exit the market.  So much for that evening spent filling out the application.

We wish those people that were laid off best wishes in their next move.  

Both MortgageIT and VB had successful correspondent and wholesale operations in the past but does past performance in the “forward market” lead to success in the Reverse world?   And, the burning question that remains is whether the bigger players will decide to build (not good track records here), buy or “partner” (a/k/a lease) with an existing Reverse player? 

Double down on the future trend of the lease with an option to buy.

PS – If you haven’t seen ML-Implode yet, check it out to see all the latest news on lenders closing. 

Technorati tags: Reverse Mortgage, Reverse Mortgage News, HECM, FHA, Virtual Bank, MortgageIT

Mega Life

• Product Type - 6 Month Adjustable HELOC
• Index = 6 Month LIBOR
• Margin = 350
• Caps – 6% for the life of the loan
• Max Loan Amount = None
• Purchase or Refinance
• Owner Occupied Only
• Single Family, Condos, Co-Ops (NY City only)
• One Appraisal needed for properties below home values of $1.8 Million, 2 Appraisals above 1.8 million
• Servicing – $30/month
• Broker Fees – 2% origination fee
• Virtual Bank Admin Fee = $325 (Paid by Borrower)

The Mega Life product is competitive with most jumbo reverse mortgages available, but the Prime Life and Life Plan stand out more when comparing Virtual Bank to other reverse mortgage lenders.  To get more information on Virtual Bank’s products click the link below.

Virtual Bank Seniors Lending Group

Prime LIFE

• Product Type – Floating HELOC
• Index = Based on Prime Rate
• Margin = 50
• Caps – 6% for the life of the loan
• Initial Rate = Prime + 50
• Max Loan Amount = $312,750 (based on age)
• Purchase or Refinance
• Owner Occupied Only
• Single Family, Condos, Co-Ops (NY City only)
• One Appraisal needed
• Servicing – $30/month
• Broker Fees – 2% origination fee
• Virtual Bank Admin Fee = $325 (Paid by Borrower)

Along with the Prime LIFE and LIFE Plan, Virtual Bank also offers a jumbo product called the Mega LIFE.  More details to follow in a few days.

Technorati tags: Reverse Mortgage, HECM, Reverse Mortgage News, VirtualBank, FHA, HUD

LIFE Plan

• Based on 1 year Treasury CMT (Adjusted Monthly)
• Margin = 200
• Caps – 6% for the life of the loan
• Max Loan Amount = $330,600 (based on age)
• Purchase or Refinance
• Owner Occupied Only
• Single Family, Condos, Co-Ops (NY City only)
• One Appraisal needed
• Servicing – $30/month
• Broker Fees – 2% origination fee
• Virtual Bank Fee – 2% lenders fee

Along with the “Life Plan”, they are also offering a “Prime LIFE” and “Mega LIFE” product.  While I like what Virtual Bank is trying to do I think they are missing out on a good amount of business by not offering the HECM product.  If you are curious on how the ”LIFE Plan” and the rest of the LIFE suite of products stacks up against the HECM, check out the web site where they have a calculator that will compare all three products against the HECM product.  Later this week I will feature the other two products they offer.

Cheers!

Technorati tags: Reverse Mortgage, HECM, Virtual Bank, Life Plan, FHA, Reverse Mortgage News

Virtual Bank, a division of Lydian Private Bank announced today the formation of their Seniors Lending Group which specializes in a suite of conventional reverse mortgage products. According to the press release, Virtual Lending Group has developed three reverse mortgage products called Lifetime Income From Equity (“LIFE”). The LIFE Plan, Prime LIFE, and Jumbo LIFE are said to offer homeowners more advantages than the current HECM programs.

Along with the new suite of products, Seniors Lending Group has also developed an easy to use, web based loan origination system for originators called Electronic Data Input Technology (EDIT). Al Rodriguez, President of VirutalBank Seniors Lending Group says, “This system resolves many of the issues originators have today with the complexity of registering reverse mortgage products. Once logged in originators can quickly compare our products with the FHA HECM product and provide the best solution for their client.”

According to the press release, these programs will only be offered through an approved originator network of mortgage bankers and financial institutions. Once I get some more information on the products I will be sure to post more details. To read a full copy of the press release click the link below.

VirtualBank Creates Senior Lending Group (PR-inside)

Technorati tags: Reverse Mortgage, HECM, LIFE Products, Seniors Lending Group