Today 1st Reverse Financial Services announced that they have updated their HECM Pathway™ program which is designed to assist borrowers in hardship situations where they receive little to no proceeds after settlement. The product can also be used if borrowers are short on funds to close and are required to bring funds to settlement.
Originally released in August of last year, the Pathway was based off of the CMT index but now borrowers have the choice using the LIBOR index as well. Allowing borrowers to access both indexes will create more opportunities for borrowers to qualify. “With declining home values and more conservative secondary market guidelines, the HECM Pathway™ helps more borrowers to enjoy the benefits of a reverse mortgage loan and assists lenders in moving more pipeline loans to a closed and funded status,” said Ralph Rosynek, President of 1st Reverse.
For a 70 year old borrower with a $200,000 appraised value home (assumes this is below the county lending limit and is therefore the Max. Claim Amt), a borrower under a HECM Pathway will receive (based upon rates available on 7/1/2008) approximately $4,000 in additional net principal limit vs. a standard HECM. To read a copy of the press release click the link below.