Buena Park, Calif.-based Sun West Mortgage Company announced the launch of “CashKeeper” — a new proprietary reverse mortgage product — which is the latest in a line of private reverse mortgage products aiming to provide financing for loan amounts higher than the maximum limit set by the Federal Housing Administration (FHA) for the more traditional Home Equity Conversion Mortgage (HECM) program.
Announced to partners late last week, CashKeeper features loan amounts of up to $2,287,500 for an owner occupied primary residence on purchase and refinance transactions. The loan amount is based on factors including interest rate, home value and age of the youngest borrower or eligible non-borrowing spouse. A loan amount reduction is applicable based on the property’s value.
For Sun West, the roots of CashKeeper actually go back wel over a decade, according to Sun West CEO Pavan Agarwal.
“We reactivated a program that we offered dating back 2007,” Agarwal tells RMD in an email. “As Sun West changed its focus to retail originations, we wanted to give our retail loan officers our CashKeeper product to better serve their customers. With the substantial untapped equity for homeowners over age 62, we felt it was the right time to relaunch. We developed the product based on consumer demand, existing home values and other product offerings in the market.”
CashKeeper is a non-recourse, fixed rate loan. Available rates are 6.25%, 7%, and 7.5%. The borrower has the option to loan proceeds either as one lump sum, or in the form of a monthly term payment. Eligible properties in addition to single-family homes include planned unit developments, site condominiums and FHA or Fannie Mae-approved condominiums.
The minimum property value required to qualify for a CashKeeper loan is $400,000, while it also requires a borrower to have a minimum FICO credit score of 660 for all borrowers involved in the transaction. The product features no mortgage insurance premiums. It’s currently only available in California where Sun West is based, but Agarwal says that plans are to roll the product out to the other states in which it operates when it is permitted to do so.
When asked about some of the recent coronavirus-induced pricing volatility that has caused other reverse mortgage lenders to suspend their own proprietary offerings, Sun West is confident that similar issues are not particularly likely in the case of CashKeeper.
“We expect pricing to remain stable for the foreseeable future and for the long term,” Agarwal tells RMD. “Our investment partner understands the value the product provides to seniors in this housing market.”
The effects of the pandemic have not affected the roll-out of CashKeeper in any discernible fashion, according to Agarwal. When asked about how the company plans to differentiate CashKeeper from competing proprietary reverse mortgage offerings, that part comes down to pricing and service, Agarwal says.
“Sun West has always offered good mortgage products at a competitive price,” he says. “We offer excellent service and have always competed fairly to serve our customers.”
Sun West Mortgage most recently ranked #31 on a list of top 100 reverse mortgage lenders based on retail and wholesale volume compiled by Reverse Market Insight, with a total of 133 endorsements over a period of 12 months ending March 2020. The majority of Sun West’s volume is on the wholesale side, which accounted for over 90% of those endorsements.