In today’s Wall Street Journal an article was written about the costs that are associated with a reverse mortgage and some of the other pitfalls that can occur from a reverse mortgage. They mentioned that Countrywide and Bank of America are planning to enter the reverse mortgage market and how this will create more competition which will lead to a reduction of costs associated with a reverse mortgage. Personally, I think it’s great the big players will be entering the market because it will help getting the product out to the right people and allow mortgage bankers more options of where to sell their reverse mortgage production. Once this starts happening I am anticipating that you will see more Wall Street firms enter the market as well. Reverse mortgage products are a great fit for Wall Street based off the servicing that can be expected from these products and not to mention that they are loans that are insured by HUD. If you were Wall Street what would you rather buy… alt-a or sub prime loans at 8% or HECM loans at 8%?
Below is a link to the full article…. Have a great day!