This week, because of the floor used in finding Principal Limit Factors (PLF’s), all Treasury-based HECM’s with a margin of +158 or less will give the same maximum PLF’s as will all LIBOR-based HECM’s with margins of +91 or less. Using these margins, the initial note rate on a LIBOR HECM will be 42 bp less than that on a Treasury HECM. LIBOR HECM should have some traction!
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