EquityKey Repurchased By Founders, Looks For New Funding

image EquityKey sent out a notice to originators last week informing brokers them that it had been repurchased by its original founders and is no longer owned or funded by KBC Bank. 

According to the statement, the company is in the process of identifying new funding sources with the intention of resuming funding in the second half of 2009.  See a copy of the statement below:

EquityKey is on the move and we wanted to keep you informed of our progress. Effective March 4, 2009, EquityKey is no longer owned or funded by KBC Bank. Our original founders have repurchased the Company from the bank and are in the process of identifying new funding sources with the intention of resuming funding in the second half of 2009.

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In the meantime we believe it is in the best interest our potential clients to not accept additional applications as we are focusing 100% of our efforts on securing new funding partners; all of our resources are committed to this effort. For those cases currently on hold with us, please advise your clients that we continue to be optimistic about their case and the future of EquityKey and its ability to weather the ongoing storm in the capital markets. When EquityKey resumes funding, we will pull first from the $500 million in existing inventory of successfully underwritten applications. For those of you who have continued to send us applications during the last few months, thank you! We look forward to rewarding that belief in us with successfully funded deals this year.

EquityKey’s product provided a cash advance on a house in exchange for the right to share in the homes future appreciation and started to take off in 2008.  With the lack of a competitive jumbo reverse mortgage product, it was a great alternative for some people.

However, the company halted funding in November of 2008 as the credit markets continued to deteriorate. 

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  • To the Cynic, et al:

    You are correct. Bravo! or Brava? I dunno.

    I am a Certified EquityKey Associate and you are correct that you must obtain a real estate license, which I did when I decided to add EquityKey to my portfolio of products I offer seniors. I originate reverse mortgages and have several EquityKey underwritten applications waiting funding. In my professional opinion, EquityKey is an excellent option and in some cases, virtually the only alternative to a reverse mortgage when seniors have too much debt to be completely satisfied by the proceeds of their reverse.

    Other seniors simply prefer EquityKey because they do not exchange equity in their home for interest payments. EquityKey need never be repaid, unless the senior decides to sell his/her home very early on in the deal and before EquityKey had a reasonable chance to make money through normal home appreciation. See my website if you wish to learn more.

    Ciao.

  • >>Isn’t Equity Key a real estate transaction?

    No – it’s a Real Estate option program and a Senior can’t pariticpate unless they’re insurable (they’ve got to be in tables 1 or 2 in order for program to work properly). When Equtiy Key was initially conceived it wasn’t known if it would fall under the Department of Insurance or Department of Real Estate, because it’s a hybrid of both. It fits with the DRE because of the “performance lien” Equtiy Key places against Title (to ensure the performance of the option contract) It’d fall under the DOI if it wasn’t for that lien.

  • EquityKey is a program for senior homeowners age 65 and older who wish to access money today for exchanging a portion of their future home value.Unlike Reverse Mortgages, the EquityKey has no closing costs and does not affect current equity in the home. Lump Sum Annuity

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