Proprietary products are gaining popularity in the reverse mortgage industry but originators are still looking for more private products to hit the market in the future.
According to a recent report for Reverse Mortgage Daily, originators would especially like to see products that are in direct competition with Home Equity Conversion Mortgages.
"Anything we can do to provide additional options to the HECM is productive, and good for the borrowers,” says Scott Harmes, national manager at C2 Reverse Mortgage in San Diego, Calif., according to RMD.
"We’ve got to have a product that the lenders want to offer, that originators want to originate, and that borrowers want to utilize."
For originators this means having the competitive edge over HECM offerings. Experts in the industry provided a few examples of products that could meet the criteria. One of these ideas include adding a GSE or private MI to help cover debt in ending home value.
"One would be private lender administration with another government-sponsored enterprise (GSE) involved in offering lenders mortgage insurance (MI) guaranteeing their investors that the ending home value will cover the debt," offers Mac Tennant, president and co-founder of Access Reverse Mortgage Corporation in Clearwater, Fla., according to the report.
“The non-recourse aspect of reverse mortgages represents a significant investor risk. Some sort of GSE or private MI covering that risk should drop interest rates demanded by investors into the range we see on HECMs.”
To learn more about what originators are looking for out of private products, click on the image above.