Financial Freedom Rolls Out Aggressive Adjustable Rate HECM, Will it Help?

NewImage.jpgFinancial Freedom released an adjustable rate HECM product with a 200 margin and no servicing fee to wholesale customers on Tuesday.

While other wholesalers like Live Well Financial have offered a no SFSA for adjustable rate reverse mortgages to brokers, Financial Freedom’s margin makes it the best in the market said several brokers on Wednesday.

For the last few months, brokers haven’t been able to compete against banks since they’re eliminating the upfront costs and servicing fee for adjustable rate products.  The new offering from Financial Freedom allows them to at least remain competitive, but none of the lenders said they planned to send the company any business.

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For years, Financial Freedom was the largest wholesale lender and no one came close to matching their production.  But when IndyMac started to run into trouble, the company’s volume started to fall dramatically and continued after it was acquired by One West.

Despite One West claiming it’s dedicated to the reverse mortgage business, this year hasn’t been any better.  Wholesale reverse mortgage volume is down  72.8% during 2010, making them the 6th largest wholesale lender according to data from Reverse Market Insight.

One has to wonder whether this is the last ditch effort to drum up some business.  RMD asked the company, but has yet to receive a response.

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  • >>For years, Financial Freedom was the largest wholesale lender and no one came close to matching their production.

    For years, Financial Freedom was my primary wholesaler, and it was unfortunate for me, because they’ve solicited all my clients to refinance with them. With business practices like that, it’s no wonder their production has decreased … I’m sure I’m not the only one that won’t do business with them anymore.

  • Buying Market Share to prop up your numbers is a long-standing practice, especially among lenders whose models of business include poor communication, unique but rigid procedures, and whose idea of ideal transparency is a “black box”. I think these reflect poor vision, poor management, and a correspondingly mis-oriented corporate culture.

    These companies survive, not because of aggressive pricing, but because of the caring, dedicated people who work for them and who help their brokers and borrowers deal with the institutional culture and processes; in many cases, circumventing them.

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