Recouping profits and preparing the consumer
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It was once the cash cow of our industry and the product de jour for borrowers. The Standard Fixed Rate HECM. It gave consumers maximum proceeds and lenders and brokers a handsome back end premium due. Without this product some have wondered how they can regain some of their lost profit margins.
Reverse Market Insight which tracks our industry shows a recent shift to 95% adjustable or ARM products. Compare that to the prior 75% marketshare the Standard Fixed once held. Now professionals are looking at the revenue per loan. If the average funded amount on reverse mortgages declines, regardless of product type, then the revenue per loan will decline as well”. All which means lender will most likely recoup some of these losses with origination fees.