We’re entering a time of great change in the reverse mortgage industry, with the Home Equity Conversion Mortgage final rule taking effect September 19 and potentially industry-shifting updates to principal limit factors and mortgage insurance premiums set to drop on October 2. In case you’e been busy sorting out what the changes mean for your business, here’s a quick rundown of the week in HECMs:
New Reverse Mortgage Rules Expected to Cut Volume, Margins — RMD asked industry players for their takes on how lower principal limits and higher MIPs for some borrowers will affect the industry, with increased competition predicted ahead — as well as a potential endorsement drop of 25%.
AAG Expands Beyond Reverse Mortgages with Real Estate Launch — American Advisors Group won’t yet comment on it publicly, but the reverse mortgage giant seems to be planning an entrance into the real estate market — potentially in an attempt to capitalize on the vast quantity of calls it receives from consumers each day by offering new services.
What HUD’s New Rules Mean for the Reverse Mortgage Industry — Bookmark this link for an all-in-one primer on how the new HECM rules will affect your business, whether you work for lender or on your own as a broker. In short, it’s going to cost more for borrowers who aren’t looking for high initial draws upfront, while available cash will drop significantly for all applicants.
Trump Taps Montgomery for Second Stint as FHA Commissioner — President Trump announced his intention to nominate Brian Montgomery for his second tour of duty as Federal Housing Administration commissioner, ending extended speculation about the open position and putting a public HECM advocate in charge of the program once again.
Wells Fargo Eliminates 116 Reverse Mortgage Servicing Jobs — Wells Fargo formally exited the reverse mortgage business this week, announcing the layoff of 116 employees who worked in its reverse mortgage service call center in South Carolina. On September 1, Champion Mortgage took over Wells Fargo’s remaining portfolio of 80,000 HECMs, completing a process that began all the way back in 2011, when the banking giant closed down its reverse mortgage origination shop.
Reverse mortgage newcomer changes name
Starkey Mortgage, which announced its entrance into the reverse space last month, will change its name to Certainty Home Loans on October 2, the company announced on Friday.
The Plano, Texas-based lender — which operates in the Southeast and Colorado — worked with Chemistry Communications of Atlanta to develop the new name, which the company says highlights its long-term relationships with borrowers and on-time closings.
“Our industry is rapidly changing with regulations, digital mortgages, and the fundamental shift in the profile of the mortgage customer; the rebrand ensures we continue to create personal, meaningful and relevant connections with customers, employees, builders, Realtors and other referral sources,” Starkey president Jim Clapp said in a statement announcing the name change.
Written by Alex Spanko