The Sky Is Not Falling with Interest Rate Hikes

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Interest rate hikes are here. How to cope?

reverse mortgageThe Federal Reserve has already increased the benchmark federal funds rate and has telegraphed their intention for additional hikes this year. Do reverse mortgage lenders and borrowers need to worry?

Be careful what you wish for. Monetary policy dictates that as the economy improves, interest rates are adjusted to more normative levels in the efforts to curb inflation and prevent market bubbles triggered by cheap money.

Reverse mortgage borrowers reluctant to pay higher closing costs were often won over with lender pricing concessions. IBIS’s weekly rate updates show the gradual erosion of lender margins, eroding the ability of HECM lenders to reduce origination fees or to cut other costs….
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