Yesterday Bank of New York released that they are reducing the margin by half
a percentage point on their reverse mortgage product. This is the first change in margin that the reverse mortgage industry has seen since 2001. Look for changes like these to start happening more often with the bigger players entering the market and creating more competition. Below is a link to the article from Bloomberg which goes into more detail on the change.
Bank of New York Cuts “Reverse” Mortgage Rates on Bond Demand
This lower margin will give borrowers more access to the equity they have in their homes. It will be interesting to see what the other lenders will do to stay competitive with BNY Mortgage. Lenders might also want to look at higher margins which may help alleviate some of the large closing costs that are associated with the loans.
Things are changing… I will keep you posted.
Technorati tags: Reverse Mortgage, HECM, Mortgage
