It’s finally warming up around RMD’s headquarters in Chicago, and with the long-awaited spring weather came a bumper crop of news from around the reverse mortgage world and beyond.
So if you’ve been too lost in the Comey-Trump soap opera to follow RMD’s coverage of the week in Home Equity Conversion Mortgages, check out our top five stories from the last five days.
Fox Business Tackles Reverse Mortgage for Purchase in “Property Man” Segment — Fox Business host Bob Massi — along with his impressive Fabio-style hairdo — dedicated a big chunk of his most recent episode of “The Property Man” to the reverse mortgage, featuring a pair of HECM for Purchase success stories and industry insight from Josh Shein of Home Point Financial.
With “Gray Divorce” on the Rise, Reverse Mortgage Lenders See Opportunity — Older Americans may still have the lowest divorce rates of any age group, but they’ve seen the fastest rise in marriage splits over the last 25 years, and the financial consequences of divorce can be more devastating later in life: After all, retirement’s right at the door, and older divorcees don’t have time to reset their lives before they face the costs and decisions associated with aging. On this recent webinar, a variety of experts discussed how a reverse mortgage could help ease a late-in-life transition from married to single.
Sun-Times: Jesse Jackson Intervenes in Reverse Mortgage Default — RMD readers had a lot to say about this story out of Chicago’s Bronzeville neighborhood, where a 97-year-old minister and community leader faced a tax-and-insurance default on the home where she’d lived since childhood. Civil rights activist Jesse Jackson intervened on the Rev. Helen Sinclair’s behalf, and a Wells Fargo spokesperson told the Chicago Sun-Times that the company was exploring alternatives to foreclosures.
Walter Loses $5.3M on Reverse Mortgages in Q1, Turns in Small Overall Gain — Executives at Walter Investment Management Corporation (NYSE: WAC) — which services but no longer originates reverse mortgages — sounded like they couldn’t wait to exit the HECM business completely on the company’s quarterly earnings call this week. The company reported a $5.3 million loss on its reverse mortgage servicing operations, and continued to indicate that all options are on the table for its portfolio going forward — including an outright sale. WAC’s stock rose, however, on an overall positive earnings call that saw growth in Walter’s forward mortgage operations.
CBO’s Crystal Ball to 2047: Older Population, Higher Interest Rates — Courtesy of the nonpartisan Congressional Budget Office comes this picture of the United States in 2047: older, healthier, and so much farther in debt. The CBO’s analysis lays out the challenges that will face financial planners and mortgage brokers in the future, as Americans live longer but must endure growing economic uncertainty and rising interest rates.
Reverse Mortgages Around the Web
HECMs Down Under and North of the Border — A flurry of reverse mortgage news from outside the United States came into RMD’s inbox this week. Let’s start with this piece from the Sydney Morning Herald, in which finance columnist Noel Whittaker advises a woman whose “mum” wants to sell her $1 million apartment(!) in Sydney and move into a place that the letter writer owns with her husband in Brisbane. In an interesting twist on a common reverse-mortgage concern, Whittaker points out that Mum’s heirs could lose out on the appreciation in the $1 million condo’s value were she to sell, and instead recommends that she take out a small reverse mortgage and remain at home. “This would enable Mum to keep her pension, continue living in her own home, and preserve any capital growth in the property for the estate.”
Just across the Tasman Sea in New Zealand, a bank announced the introduction of a monthly-payment reverse mortgage amid apparently increasing demand for the products: Heartland Bank reported a spike in reverse mortgage book value from $28 million to $365 million between 2015 and 2015. And though this particular pitch comes from the other side of the world, the language sounds familiar: “While not suitable for everyone, a reverse mortgage is the right loan product for the right person,” Heartland senior manager Lisa Hatfield said in a press release. But an interesting difference: The release points out that Kiwi reverse mortgage holders only keep theirs for eight years, with the products designed as a bridge between the family home and a retirement community.
Closer to home, HomEquity Bank in Canada assured potential borrowers that no, they don’t want to take their homes — in fact, they’ll only be able to access 55% of the home’s value through a reverse mortgage loan. This conservative approach means that, at least according to HomeEquity, 99% of Canadian reverse mortgage borrowers still have money left over after selling their properties and settling up their debts.
Ocwen and Texas
You may have seen some reports this week about Texas joining the multi-state cease-and-desist action against Ocwen Financial Corporation (NYSE: OCN). For the record, Texas has always been part of the 21-state-plus-D.C. dogpile on Ocwen; the Lone Star State issued its order against the troubled servicer on April 20, the same day that RMD and multiple other outlets reported the news. In its formal letter, which Texas Department of Savings and Mortgage Lending legal assistant Cora Peck forwarded to RMD on April 26, the state gave Ocwen until May 22 to file an appeal.
Like every state involved in the action not named Illinois, Texas did not include Ocwen’s reverse mortgage arm, Liberty Home Equity Solutions, in its formal order. As RMD reported, the Land of Lincoln’s decision to ding Liberty was merely a preventative measure to ensure that Ocwen couldn’t merely shift its “forward” origination and servicing operations to Liberty to evade the ban.
Written by Alex Spanko