American Banker Article
Pipeline: Reverses Advance
American Banker (05/31/07) P. 9; Launder, William
Nationwide, many lenders have begun offering fixed rates on reverse mortgages–which enable homeowners 62 and older to convert some of their home equity into a cash payment. Florida-based Value Financial Mortgage Services Inc. last week announced that its fixed-rate product would be set under 7 percent, while Borba Investments Inc. of California’s MLS Reverse Mortgage is allowing eligible homeowners to lock in at a rate of 6.5 percent. While most reverse loans carry an adjustable rate of about 5.86 percent, Borba President and CEO Mike Borba says borrowers who take out fixed products will have access to the money in a lump sum, whereas adjustable borrowers usually receive monthly payments. Additionally, Borba describes the reverse mortgage market as evolving “tremendously” and “so quickly” that lower rates may be possible in the future.