Boasting that his will be “the first lender in the country with private insurance on proprietary reverse mortgage products,” Tom Walker, president/CEO of Members Trust Co., Tampa, a Credit Union Service Organization (CUSO), says "We are very close to getting private insurance” for the loans.
Founded as a state chartered trust company, by Suncoast Schools Federal Credit Union, Members Trust Company became a federal thrift institution in 2003, chartered by the Office of Thrift Supervision. With that imprimatur, it can offer trust services to members of credit unions across the country.
Walker tells RMD that the CUSO is in “serious conversations" with one insurance company to underwrite its reverse mortgages, but adds that the “current financial meltdown has prevented progress” thus far. Undaunted, he predicts Members Trust will have such an agreement by the end of this year.
Walker’s institution has grown quickly, now working with 10 credit unions spanning a combined membership of some 500,000. Its first reverse mortgage was completed last April and Walker reports another 30 credit unions are considering offering the senior loan product through Members Trust.
Under this model, the origination fee would be set by the lender based on the line of credit, as opposed to the home’s market value, because there is no insurance premium required, explains Walker, who says such features often save the borrower as much as $12,000.