A few weeks ago Bank of America completed the acquisition of Seattle Mortgage’s reverse mortgage division. Before the purchase, BofA started originating reverse mortgages through a pilot program they started in Arizona. The program offered the standard HECM products as well as a proprietary product called the Senior Equity MaximizerTM.
Recently Realty Times wrote that, “Not only does it have a high maximum loan limit-about $10 million, according to officials-but it also cuts fees, raises loan-to-value ratios and offers automatic increases in available loan amounts as property values grow.” I wasn’t able to find out what the rate would be on the Senior Equity Maximizer, but I was able to find this:
Features of Simple Equity Maximizer
- Draw Limit Increase — Your available credit will automatically increase each month, even if your line is fully drawn.
- Equity Preservation — You can preserve a percentage of your home’s appraised value at loan origination. When the loan becomes due, that percentage of the appraised home value cannot be collected by Bank of America.
- Reassessment — You can refinance your loan without paying all of the typical origination costs. If your circumstances change, you may be eligible for more money.
- Non-Recourse — You will never owe more than the value of your home. Neither you nor your heirs will have personal liability for the loan.
Fees for Simple Equity Maximizer
- Origination Fee = 1% of home value (maximum of $10,000)
- Processing Fee = $795
- Closing Costs = Typical closing costs apply
- Servicing Fee = $25 per month
- Interest Rate = An adjustable rate that will adjust monthly with your statement
According to the article “Reverse-mortgage market zooms forward” from MarketWatch, BofA is planning to release the product nationwide soon. No word if BofA is planning to offer it to brokers through their wholesale channel. If anyone has more information on the product please let me know.