Your Estate

Bank of America recently announced that they will be offering LIBOR based reverse mortgage products to wholesale brokers.  According to the announcement, Bank of America still believes that the CMT index is better for you and you customer but they realize the spreads between LIBOR and CMT are volatile and may reverse course in the coming months.

I was surprised to find out that Bank of America hadn’t offered LIBOR products for the past few months.  The industry has shifted to LIBOR products and I think over the long run it’s the better option for everyone.  Bank of America’s LIBOR offering only allows for LIBOR 125 and 150 margin products and the pricing isn’t very aggressive.  Actually, it’s really far off compared to other lenders.

In August, former Countrywide executive Steve Boland was named as Bank of America’s reverse mortgage executive.  Boland brings over 11 years of experience with Countrywide and was their managing director and CEO of its reverse mortgage division.  At the moment the two companies are operating as separate companies but plan to be fully integrated in mid-2009.

The size of Bank of America’s branch network could be one of their advantages over others in the market.  However, they have been slow to integrate reverse mortgages into their branches across the country.  A month ago I walked into local branch here in Chicago and asked to speak with someone about reverse mortgages and it was clear they didn’t know much about the product.  I was handed off to four different people and after 45 minutes of waiting I just walked out.

I’d expect that to change soon…

Technorati Tags: Reverse Mortgage,News,Bank of America,HECM,FHA,Countrywide

During the events of yesterday, I was able to pick up the phone and call my father to talk through my thoughts on this issue. This is a huge deal - the biggest shake-up in many American’s lifetimes. I am going to pay attention. I am going to listen. I am going to participate. I am going to learn.

We are a society used to instant gratification. Yesterday, anyone on the pro-bailout side, used to our “gimme now” culture, had a new order thrust their way - wait and see.

Regardless of what side of the fence you’re on, we’re all chomping at the bit. We all want the same thing in the end - a reasonable resolution and some peace of mind.

After my conversation with my father, the television spouting its fear in the background, I turned to the Internet and scoured the news stories. I watched in eerie fascination as Congress cast its vote and Wall Street responded in kind. Even though I wasn’t keen on the bailout, I do feel we can’t be completely hands off this issue, so when the politicking began, I was feeling a little powerless; a little sad.

I jumped back on my computer and signed into Twitter. Here I found that Web 2.0 gave me a pill for my bailout blues.

Conversations were buzzing yesterday. Many of them were happening online. You could talk with people across the nation or overseas about the bailout. This kind of connectivity is unprecedented … and comforting.

The President just spoke, and his 10-minute blurb did nothing to put my mind at ease or answer my questions. Television is a one-way medium and it pumps fear into millions of living rooms across America like nobody’s business.

If you’re feeling helpless, confused, aggravated or uncertain, you might want to stop staring at your screen and hop online. The conversations continue and the invitation to join is open.

Some of my conversations:

• Twitter - I’m @rebeccalev
• $700 billion bailout - Lifesaver or Band-Aid?
• The House kills it. Capitalism survives for one more day.
• Not a Dime! Stop the bailout
• ANOTHER DRAG ON THE ECONOMY? AN UNTOLD STORY…The Loss of Consumer Credit.

Get involved in a conversation or start one one on this post. It’s time for blunt talk and change, folks.

Posted by Rebecca D. Levinson

Mortgage Cadence announced the seamless integration between Ibis Software’s Reverse Mortgage Originator (RMO) product and its document preparation software Mortgage Cadence Finale.  The integration provides Ibis RMO customers with the opportunity to leverage superior document preparation and delivery through a comprehensive platform that accelerates the lending process and ultimately increases customer satisfaction.

Mortgage Cadence Finale has native data links within RMO, enabling lenders to dynamically create and return initial disclosures & closing packages in under 10 seconds and deliver them securely to the borrower or settlement agent over the Web.

(more…)

Unfortunately our forecast from last week came true. On Tuesday, September 30th, the average HECM borrower will receive considerably lower benefits.  Yesterday, the 10-year Treasury rate plummeted today to 3.58%, last week’s average was 3.84%! If rates hold this week (highly unlikely), on Tuesday October 7th, Treasury-HECM borrowers could regain some of the lowered benefits above. It doesn’t appear that the 10-year Swap Rate changed much today.  

So this week’s HECM rates (which are based on last week’s averages) is an aberration. Perhaps no Apps should be taken until October 7th? This week, all Treasury-based HECM’s with a margin of +172 or less will pay the HECM maximum benefits. Ditto for LIBOR-based HECM’s with margins of +104 or less. Using these margins, the initial note rate on a LIBOR HECM would be 87 bp less than that on a Treasury HECM.

(more…)

This week, the American public will witness another bill: The Emergency Economic Stabilization Act is up for vote in Congress to help American homeowners. A $700 billion bailout - here’s what I am hearing from media players that it will do:

• “Help homeowners save their homes by giving them the ability to refinance into another loan”
• “Save America from a financial crisis similar to the Great Depression”
• “Restore consumer confidence in the economy”

So it’s all great news, everyone’s happy - right?

I have a few questions.

While homeowners might be able to refinance their loans … will it be too late? Do many of these homeowners have the means to pay on their mortgages, especially if they are already behind?

• Are we delaying an inevitable cause-and-effect ripple?
• Will there be reasonable criteria to approve home buyers for a mortgage? Will the bill cause mortgage approval restrictions to tighten up further and push first-time home buyers out of the housing market?
• What about the unemployment rate? As of the Washington Mutual bankruptcy, financial experts are saying hundreds of thousands will be jobless. Isn’t unemployment a factor that affects the economy?
• Which homeowners will the bill help? There is already a glut of foreclosed properties and REOs on markets across the United States … can the bill help that?

My biggest question (selfish me) is: How does this affect me, an American taxpayer? Before this $700 billion bill, there have been other monetary bills passed to help stop the downturn in the housing market. Is anyone adding up the bill?

What does this mean for me and my family come tax time 2009?

I have so many questions because I am serious about my money and how it’s spent. Maybe it’s because I only hear pros and cons, not a serious “common person” discussion of the major points of the bill and the cause and effect of each.

I am asking Congress members before they vote to put a face on the people this bill will affect. Put real-life scenarios behind your words … and once you’ve done that, and only then … cast your vote. And make sure to be real with the American people about what this bailout means to us.

It is our money, after all.

UPDATE as of 1:56 p.m EST today: US HOUSE VOTES ON BAILOUT — YES to plan: 186; NO: 201; Not yet voted: 47; VOTING HAS ENDED; VOTING EXTENDED. -Courtesy of my associates onTwitter - @andykaufman and @mdelfs

UPDATE as of 3:348 P.M.-  Bill rejected 228 to 205.

Back to the drawing board, we’ll be watching.

Posted by Rebecca D. Levinson

With the first debate between Obama and McCain over, I’m curious who RMD readers think will be a better President for the reverse mortgage business.  Personally, I think the candidate who will do a better job managing the financial crisis will be the best choice for the reverse mortgage business.  In order for the reverse mortgage business to continue growing at the current pace we need some sort of a functioning forward business.  But what candidate is the better choice to manage the housing crisis?

(more…)

A quick reminder that Reverse Mortgage Daily and Stephen Kinney are presenting another free telephone seminar on October 1^st at 12PM (EST).

"Making Contact" - Tips on beginning the Reverse Mortgage conversation

In the session Steven will cover:

(more…)