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Like overall mortgage activity, the reverse mortgage industry also saw quite an uptick in 2020 and mortgage loan originators don't expect the activity to dwindle in 2021. A report from Reverse Mortgage Daily revealed that originators around the country are reporting an increase in business even as the COVID-19 pandemic continues and the threat of policy changes.
"The phone is ringing every day, I can’t write them fast enough," said Tim Kennedy, director of business development at U.S. Mortgage Corporation in Long Island, NY, according to RMD. "Increasing the lending limit has helped. Where I’ve had borrowers in the past that didn’t qualify or didn’t get enough money, I’ve now been able to call them back and rerun the numbers. What’s happening is they’re a year or two older, their house value has gone up a little bit more. Or, if it’s over the $822,375 they get that much more money. Now with the lending limit at $822,375, they’re talking about doing a HECM. Instead of taking all this money out on day one with the HomeSafe option, [sometimes they choose to] leave it on the line of credit and have the benefit of the guaranteed growth rate factor. They’re looking at both choices or both options, saying maybe the Home Equity Conversion Mortgage [is more beneficial] versus the jumbo, which is interesting."
Kennedy also told the publication that folks who are looking into reverse mortgages are paying attention and are in tune with the products.
Brandi Braley, a loan originator with Neighborhood Mortgage in Bellingham, WA told the publication that she believes business will continue to heighten due to the increased unemployment caused by the pandemic. She states that folks who may have lost their jobs before retirement could use these products as a way to help fund their retirement.
Click here to read more from the report.