Live Well Financial, Inc. announced Thursday that it will offer a new fixed rate reverse mortgage product, following an announcement earlier this week of the launch of another new HECM loan made available by Reverse Mortgage Funding.
Live Well, an HMBS issuer, says it will securitize the new product, coined the HECM Fixed Advantage, for sale on the secondary market. The product’s features allow the borrower to withdraw the remaining funds from a fixed rate reverse mortgage one year after the loan has closed, after initial use limitations apply for the first year post-closing.
“Instead of requiring a borrower to take a term or tenure payment to obtain the additional funds, the HECM Advantage will automatically provide the borrower with 100% of their remaining funds on day 366,” said Bruce Barnes, executive vice president of Live Well Financial. “This is a significant difference [between the HECM Advantage and the HECM Choice] and one that we believe borrowers and lenders will prefer.”
Insured by the Federal Housing Administration, Live Well’s HECM Fixed Advantage enables borrowers to draw their maximum principal limit at a fixed rate at closing—60% or higher with mandatory obligations—then draw the rest of their available funds 12 months later.
Live Well plans to make the HECM Fixed Advantage immediately available to all brokers and correspondents through the company’s wholesale channel. When asked whether it was the same product offered by RMF, Bruce Barnes, explained it was a competing product, to be originated and sold to investors by Live Well.
The HECM Fixed Advantage is the second new HECM product to roll out in the past week, Reverse Mortgage Funding’s announcement of its new product, the HECM Choice.