Underwriters Believe LESA Has Enhanced Reverse Mortgages

April 6, 2018

The Department of Housing and Urban Development introduced the Life-Expectancy Set-Asides three years ago and underwriters are saying that it was indeed a quality introduction to the product.


According to Reverse Mortgage Daily, LESAs require borrowers with bad credit histories to use some of their reverse mortgage funds to pay taxes and insurance. 


"'LESA was truly a gift,' Deborah Moran, underwriting manager at Reverse Mortgage Funding, told RMD," according to the report. 


“We’re giving the borrower relief by paying their taxes and insurance — less for a senior borrower to worry about. It’s good for consumers, it promotes responsible lending, and it enables originators to take more loans than they otherwise would have under Financial Assessment if there weren’t a LESA option. ”


Other underwriters in the field revealed that they gained more confidence in their decision making from the introduction of LESAs. Meanwhile underwriters also believed that marketing LESAs and reducing defaults are two additional benefits of the program. 


To learn more about why underwriters are praising the LESA three years after it was introduced, click on the image above


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