National Public Radio ran another feature on reverse mortgages earlier this week. In NPR’s Tell Me More’s “Money Coach” segment, the host discusses a range of reverse mortgage topics with personal finance contributor Alvin Hall.
During the interview, Bank of America’s decision to leave the industry comes up as a topic of discussion. When asked why the bank decided to leave the business, Hall suggests the bank left because of the fees charged on the loans.
“In the new mortgage structure, which is called the home mortgage conversion, the home equity conversion mortgage, the upfront fees have been reduced to .01 percent and that’s pretty low,” said Hall. “In the past they’ve been much, much higher. And I think it’s just not as profitable for Bank of America. They’re going to spin it a different way, of course. They’re going to say, you know, we’re going to concentrate on our core business. But in reality, they’re just not as attractive.”
Hall clearly needs to learn more about the HECM Saver vs. Standard comparison.
Listen to the segment below or check out the link here.