With all the subprime problems as of late it should be no surprise Wall Street is showing so much interest in reverse mortgage production. Reverse mortgages provides Wall Street a high yield, low LTV, and federally insured mortgage product. While the yield on a reverse mortgage may not be quite as high as your typically subprime loan, risks are slim to none when compared with an option ARM or 2/28 loan. If you attended the NRMLA conference a few months ago it was evident that Wall Street has lots of interest in reverse mortgage production.
Yesterday Mortgage Data Management Corp. issued a press release that announced the addition of reverse mortgage loans to its due diligence review service offerings. While the company reviews a variety of mortgage loans, the addition of reverse mortgage loans is a direct response to the sharp increase in the volume of loans as well as the interest MDMC’s clients have shown to purchase these loans in the secondary market.
According to Doug Lackey, principal of Mortgage Data Management Corp, “We strive to meet the ever-changing needs of our clients, so when several of our Wall Street investment bank clients approached us about adding reverse mortgages to our review, we quickly made the adjustment.” MDMC has been reviewing reverse mortgages since October of 2006 in limited capacity but as of late the company has seen an increase in volume. Karen Callans who has over 40 years of industry experience has been appointed to review and further develop MDMC’s review procedures to include reverse mortgages. “We spend at least one week a month reviewing reverse mortgages,” explains Callans. “As the subprime market continues to slow down, we expect to see more and more business come from reverse mortgages.”
To see a copy of the press release from MDMC click the link below