The recently-released HECM Choice reverse mortgage product made available in December by Reverse Mortgage Funding is now available for brokers and principal agents, the company announced Wednesday.
The Home Equity Conversion Mortgage allows borrowers to access a fixed rate lump sum upfront, with access to subsequent funds after the first year post-loan closing. Previously, it was available only to approved correspondent lender-partners with RMF.
The initial rollout of the product has been successful, the company says, with the product being offered across additional channels as the next step of its phased approach.
“The introduction of HECM Choice to the industry has been successful, the launch has gone as planned, and the product is available today to all lenders,” said David Peskin, president of Reverse Mortgage Funding. “We are pleased to bring HECM Choice to a broader base of homeowners through the addition of principal agents and brokers.”
RMF has touted the additional flexibility for borrowers as the competitive edge of the new product, as it allows the benefits of an upfront draw, a fixed rate, and ongoing future payments as agreed upon at the time of loan closing.
The product was launched following new rules placed upon HECM loans under the Department of Housing and Urban Development that limit the upfront draw available to borrowers who opt for a fixed rate.
“HECM Choice is a win for the borrower, the industry, and for business partners,” said Mike Mooney, national sales manager for the third-party channel for Reverse Mortgage Funding. “It offers borrowers a fixed rate HECM that does not require them to withdraw all of their available loan proceeds at closing. Borrowers are given the benefits of a fixed rate HECM, but with the flexibility that has historically been offered only with an adjustable rate HECM loan.””
The company also stressed the nature of the product—still a HECM reverse mortgage that is still insured by the Federal Housing Administration.
“It is fully compliant with FHA guidelines and is designed to help borrowers improve their overall cash flow – both through the elimination of any existing mortgage and the ability to set up future monthly payments based on their on-going cash flow needs” Mooney said.
Written by Elizabeth Ecker