Generation Adds No Service and Origination Fee HECM for Wholesale and Retail

201004070722.jpg Generation Mortgage Company announced it has released a new fixed-rate reverse mortgage product with no origination and servicing fee to provide senior clients more upfront loan proceeds at a lower cost.

“Generation Mortgage is pleased to support our senior community by ensuring we evolve as our industry evolves with improved product options,” said Scott Peters, President and CEO, Generation Mortgage. “We are very happy to provide access to more equity to our senior clients with these new changes.”

The new zero origination fee, zero servicing fee product applies to Generation Mortgage’s FHA-insured HECM fixed-rate product and allows qualified borrowers age 62 and older to receive additional, up-front loan proceeds of up to $10,000 or more, depending on the equity in their home.

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“We are in the business of helping clients put as much money as possible back into their pockets, and the best way to do that is by regularly evaluating how we can maximize each client’s reverse mortgage,” Peters said. “This attractive option is a function of positive market conditions. It makes sense for seniors to investigate this option now as these conditions can change at any time.”

Wholesale customers started offering the product as of April 1, 2010 said the company.

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  • How does this give seniors more access to their equity? Again and again we show we do not understand this product. Even if a HECM actually allowed access to the equity in the home, it does not provide any more access. If that were true, the principal limit would be greater. It provides the same “access” but this announcement actually means less cash needed for current (origination fees) and future expenses (monthly servicing fees).

    If this product provided access to equity, then why is it a mortgage just like all other non-recourse mortgages? If it provided access to equity, there would be a change in title. A HECM has no conversion of equity. A HECM is simply a specific type of non-recourse debt insured by FHA.

  • Welcome to the crowd. There are companies with 0 service fee and highly discounted origination fees with a 5.49% rate.

    How come the interest rate is never mentioned in these press releases? How about full disclosure? Is it another “we'll give you more upfront but you will pay”

  • No origination and no service fee. The money being made by the big boys in securitzation must be off the charts but is it helping the RM industry. It seems to just confirm the critics of the RM that the fees are to high and can be brought down — the proof is in the facts – no service fee or origination and they are still making money.

    • As investor return demands rise, the profit margins at today's interest rates should evaporate over time. It is the belief of some that we will see two basic fixed rate products, one with no servicing fee set aside and $0 optional origination fee, and one charging both but at a lower note rate.

      Lenders provided much more help to the industry by addressing upfront costs than if they had reduced note rates. More people seemed turned off by upfront costs than by the note rates.

      One just needs to look at the adjustable rate HECM to see what is going on there to realize that profits are dependent upon market conditions. As long as principal limits can increase by reductions in the margin portion of the interest rates, it is better margins are dropped rather than reducing upfront costs, at least for now.

  • Welcome to the crowd. There are companies with 0 service fee and highly discounted origination fees with a 5.49% rate.rnrnHow come the interest rate is never mentioned in these press releases? How about full disclosure? Is it another “we’ll give you more upfront but you will pay”

  • No origination and no service fee. The money being made by the big boys in securitzation must be off the charts but is it helping the RM industry. It seems to just confirm the critics of the RM that the fees are to high and can be brought down — the proof is in the facts – no service fee or origination and they are still making money.

  • As investor return demands rise, the profit margins at today’s interest rates should evaporate over time. It is the belief of some that we will see two basic fixed rate products, one with no servicing fee set aside and $0 optional origination fee, and one charging both but at a lower note rate.rnrnLenders provided much more help to the industry by addressing upfront costs than if they had reduced note rates. More people seemed turned off by upfront costs than by the note rates.rnrnOne just needs to look at the adjustable rate HECM to see what is going on there to realize that profits are dependent upon market conditions. As long as principal limits can increase by reductions in the margin portion of the interest rates, it is better margins are dropped rather than reducing upfront costs, at least for now. rn

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