Finance of America Reverse (FAR) has announced changes implemented into its HomeSafe proprietary reverse mortgage offerings, made in an effort to tackle borrower perceptions concerning the cost of taking out a reverse mortgage loan.
Among the changes FAR is making, there will be no origination fee on HomeSafe Standard, Save, Plus, and on the Flex option, while also adding the availability of a lender credit that allows options without closing costs through the product line’s middle and upper tier options. There is availability for brokers as well.
“Finance of America Reverse is committed to elevating the experience for those who do business with us and our partners,” said Kristen Sieffert, president of FAR in an email to RMD. “Historically, there has been a perception among borrowers that reverse mortgage loans are higher cost, so with the goal of creating positive outcomes for borrowers, tackling this cost issue is an important step forward.”
The prevalence of proprietary reverse mortgage products has seen a sharp uptick in interest over the last year, particularly among older borrowers who could be potentially eligible for a loan beyond the current HECM lending limit, and for those who own high-value properties.
“We are very excited about the new HomeSafe changes that just rolled out,” said Christina Harmes, assistant manager of the C2 Reverse division of broker C2 Financial Corp, in an email to RMD. “As brokers, we are constantly shopping lenders for the best options to present to our clients. Sometimes that means working numbers for five different HECM proceed structures along with 8-15 different jumbo options. It’s important to keep it as simple as possible, but just as important to show a client all of the options they have.”
These changes will allow clients to find a loan that, in the end, is a better fit for their personal financial situation, Harmes emphasized.
“I’ve sat with clients who really liked a low-cost option but weren’t satisfied with the amount they could get,” Harmes shared. “Or, they liked a monthly payment option but couldn’t get passed the origination fee, so they ultimately chose the HomeSafe Plus because they didn’t want to pay that fee on principle.”
These new changes will ultimately serve to expand the jumbo reverse mortgage market, Harmes said.
“These changes are really making the jumbo market robust, competitive and lowering the barriers for clients,” she said. “When that happens, the client is the ultimate winner.”
Sieffert previously told RMD that FAR is “very pleased” with the level of growth in their HomeSafe product suite. A FAR spokesperson also previously shared with RMD that further expansion of the HomeSafe line’s availability is a priority.
“The ultimate goal is to expand the 23 states currently offered for the original HomeSafe product to additional states and extend those states across all proprietary product iterations,” the spokesperson previously said.