Competing wholesale reverse mortgage lenders say they are beginning to see an uptick in business from brokers that previously had delivered loans to MetLife Bank. As a result of new financial assessment guidelines, one wholesale executive told RMD his business this month has been the best December on record and what typically would be a slow month for volume has not subsided at all.
“We’ve received a lot of files from brokers on MetLife [applications] afraid to send them to MetLife,” the wholesaler said.
Brokers say they are having a hard time qualifying borrowers under the guidelines, and that the assessment has added pages to the application, as well as time to go through the process with borrowers. The requirements, they say, are too tough for the average borrower to qualify.
For example, FAQs released last week and obtained by RMD after the initial financial assessment was written specify include a rule with respect to credit, stating that if a borrower owes more than $1,500 on a collection account, charge off or tax lien, it must be paid prior to closing with borrower funds, not at closing with HECM proceeds.
“Is it me, or have we gone way beyond verifying if they can pay their taxes and insurance?” one broker said.
When asked about the impact on MetLife’s volume the financial assessment has had, a MetLife spokesman declined to comment.
Written by Elizabeth Ecker