The latest edition of Kiplinger hit newsstands and includes a new article on the HECM Saver.
Released earlier this year, the product allows borrowers to withdraw smaller amounts at a lower cost compared to the traditional HECM product. Eric Declercq, vice-president of reverse-mortgage operations at MetLife Bank told the magazine, “the new Saver has virtually eliminated the upfront insurance premium.”
The most interesting piece of news comes from Declercq, who said that the HECM Saver accounts for one out of five reverse-mortgage originations at MetLife Bank. RMD reached out to MetLife and learned that HECM Saver volume has increased steadily since the roll out in October.
“This resulted from our preparing systems to handle the product well in advance of its being made available by HUD, and believe we were first to market,” Declercq told RMD. “Lastly, we offer the product through retail, wholesale and correspondent lending channels, making it available to more consumers.”
According to figures provided to RMD, MetLife’s share of HECM Saver loans increased from 5% in October, to 8% in November, to 14% in December, to nearly one in five today. After initial data from the Department of Housing and Urban Development showed less than spectacular HECM Saver endorsement numbers in November and December, the data from MetLife is an encouraging sign that consumers are responding well to the new product.
Declercq told RMD that consumers are finding the value proposition of the HECM Saver compelling and believes there could be additional room for growth. “Although we would not pretend the ability to predict how much a share the market that HECM Saver will occupy, we do expect it to grow beyond current levels,” he said.
According to data from Reverse Market Insight, MetLife endorsed 3,875 reverse mortgages during 2010 and was the 3rd largest lender.