Bank of America introduced a new adjustable rate Home Equity Conversion Mortgage (HECM) product to wholesale partners on Tuesday.
Starting September 7th, the company is offering a no servicing fee set aside (SFSA) monthly LIBOR HECM with a margin of 225 to brokers and closed loan sellers.
The new option should help brokers compete with MetLife and Wells Fargo, which have been offering a no SFSA adjustable rate product to consumers through their retail channels.
While brokers have been able to offer the HECM fixed without a SFSA for some time, BofA is the first wholesaler to introduce an adjustable rate product without a SFSA to brokers. Additionally, BofA began paying 100% of the upfront mortgage insurance premium (MIP) for fixed rate HECMs in May.
According to data from Reverse Market Insight, BofA is the second largest wholesale reverse mortgage lender during 2010.