Financial Freedom recently made some changes to their popular Cash Account program. Unlike before they will no longer offer the three sub products of the Cash Account (Credit Line Option, Combo Option and Cash Out Option). Instead they released the Cash Account Advantage® which gives correspondents and borrowers the ability to negotiate fees by having the flexibility of lowering the origination fee and/or offsetting closing costs with a credit from the correspondent. The Cash Account Advantage® will also give the borrower the option to receive funds as a credit line, lump sum, or a combination of both. Below are a few more benefits of the Cash Account Advantage®:
- 100% Origination Fee- You will now receive all of the origination fee charged to the borrower, regardless of the dollar amount.
- Flexible Fees- Originators now have the option to charge whatever origination fee your company desires, up to the limit (greater of 2% of the Principal Limit or $2,500). You also have the ability to credit as much of the premium towards the borrower’s closing costs as desired.
- Premium Pricing- Originators can now earn up to 2.5% in premium based on the initial unpaid principal balance (UPB) on this product.
These changes make Financial Freedom the first jumbo reverse mortgage lender to offer a product that gives the originator real flexibility on how to structure a jumbo reverse mortgage. Since originators are able to make a significant premium on the back end this may start a trend of lowering or eliminating origination fees. Earlier in the year Lender Lead Solutions started offering a HECM product that allowed originators a little flexibility but not nearly as much as the Cash Account Advantage®.
I’m curious why all of a sudden Financial Freedom is willing to pay so much more on the back end? I’m guessing it would have to do with all the interest we have seen from different Wall Street lenders lately but I could be wrong. Whatever the reason may be, this is a great change for Financial Freedom and it wont be long before we see the same from other reverse mortgage lenders.