Today, Financial Freedom announced the release of their new HECM Fixed product. The HECM Fixed has been getting a lot more attention since the HECM 100 is starting to disappear. Financial Freedom designed the product with the expectation that it will appeal to the secondary market and give seniors the most benefit possible. The Fixed HECM offers the investor more predictability as to cash flows, which is critical for match funding a fixed rate instrument.
“We’ve worked extensively with industry leaders to clarify the rules governing fixed-rate HECMs in order to achieve a product that meets seniors’ needs and which we believe will lead to the development of a strong secondary market for the product,” said Michelle Minier, CEO of Financial Freedom. “We expect that other lenders will embrace and replicate this closed-end, fixed rate HECM product, making it the industry standard fixed rate model.”
For the industry, having a reverse mortgage that appeals to the secondary market is critical to the long term success of the product. The ability to achieve strong, reliable execution in the secondary market ultimately lowers costs for the consumer. This is the also the hope and reason that Ginnie Mae released their new HECM mortgage backed security product this September.
“Our goal has always been to provide consumers with the most options to meet their needs,” added Ms. Minier. “We expect variable rate HECMs to remain the dominant option, however, for consumers who prefer the comfort of interest rate certainty, they have a new option: HECM Fixed from the oldest and largest reverse mortgage lender in the country.” The company also plans to launch a fixed rate proprietary jumbo later this year.