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Ugly Politics: If debt limit agreement is not reached FHA could be part of government shutdown
Yes. It’s come down to politicians in Washington threatening that seniors social security checks may stop if the debt-limit or ceiling is not raised by congress. Nice. But closer to home comes the possibility that if the limit is not raised by August 2nd, then FHA could cease operations being a non-essential agency. You get the picture…no FHA case numbers assigned, not HECMs endorsed or insured.
So will we as reverse professionals be forced into a lockout as a result of political bickering or will cooler heads prevail? What are your thoughts? Will we see FHA shut down if the debt limit is not raised?
Will the Saver take a step backwards?
It’s the new kids on the block in reverse mortgages, the HECM Saver. Less proceeds in exchange for lower…almost non-existent upfront insurance fees. Just freshly out of the gate since it’s release in October 2010 the Saver has increased to seven percent of all reverse mortgage production according to a recent article in Reverse Mortgage Daily. So why the concern about HECM Saver production now? Combined, MetLife & Wells Fargo originated 66% of the savers for our industry with Wells at 44% and MetLife at 22%. Wells exit leaves a vacuum for one of the largest sellers of the Saver loan but there is a silver lining. MetLife has been aggressive in marketing and placing the product reaching a new demographic with 15-20% of all applications being savers according to Joe Demarkey, Assistant VP of strategic business development at MetLife. It appears that MetLife is positioned to not only grab overall market share to continue to press into placing the Saver product as well.
How do we know if we are reaching a more affluent or upper-middle class market? MetLife reports they are seeing maximum claim amounts about 40% higher than with the traditional HECM. That’s substantial. Also noted is that most Saver borrowers are choosing the adjustable product not needing large upfront proceeds but the flexibility of having access to money when needed. What are your thoughts? Do you have a plan to sell the Saver and have you had any success in selling it? Leave your comments, video or text below.