What role will the jumbo reverse mortgage play in the marketplace today?
Jeff Lewis, chairman of Generation Mortgage, told the Boston Globe it not only meets the needs of borrowers with higher home values, but will also serve aging boomers who are still raising children and helping to support their own parents. Describing an experience at a conference he attended, Lewis asked if they or their parents had a reverse mortgage.
“No hands went up. When they were asked how many were writing a check every month to help their folks, more than half the people in the room raised their hands. For most of their parents, a reverse mortgage would make sense.”
Generation is the first lender to release a jumbo reverse mortgage market since the financial meltdown and closed its first loan in August. It’s the first reverse mortgage product that requires a minimum FICO score of 700, why?
Investors want to ensure that borrowers have the ability to maintain the property and pay taxes and insurance.
“The owners are obliged to keep up the property like the other properties in the neighborhood. Since there is no mortgage insurance to protect the lender, the lender wants some assurance that the owner will continue to maintain the property when there is a potential for a negative adjustment (value decreases).”
A jumbo mortgage that works in reverse