Reverse Mortgage Margins Dip As Competition Spikes
Following changes to the reverse mortgage program lenders are seeing no choice but to drop margins due to the reduction of principle limits. Rates are already beginning to dip and it does appear that they will continue to do so, according to a recent Reverse Mortgage Daily article by Jessica Guerin.
“We are seeing a good deal of variation now. We expect this level of variation to continue for another few months until we can see data from a few more trades in order for the current variation to stabilize." said Sherry Apanay, chief sales officer at Finance of America's Reverse division, according to the report.
"We expect to see rates drift downward as competition in the space embraces the new metrics.”
Experts are saying that this will make it much harder to see reverse mortgages as a viable business model. For large companies, the effect may not be as scary, however, smaller companies could find it much more difficult to thrive under these conditions.
To learn more about the decline in margins, click on the image above.