Financial Freedom announced that it’s discontinuing the HECM fixed rate product in the state of Illinois, effective immediately said the company statement.
The statement read that:
We will continue to process and fund existing Illinois Fixed-Rate loans in the pipeline pending further review of our ongoing ability to sell these loans, but can provide no current assurance that we will be able to fund all such loans in the pipeline. We will provide further guidance on the disposition of the pipeline as soon as we complete our review.
This comes after Bank of America announced it was suspending its fixed rate HECM in the state because of the Illinois High Risk Home Loan Act (HRHLA).
HRHLA applies to all closed end loans and requires lenders to compute the ratio of closing costs to loan amount or, in the case of a reverse mortgage, principal limit, in an effort to identify high-cost loans. Closing costs must not exceed 5% of the principal limit.
While Financial Freedom is following Bank of America’s lead, other lenders like MetLife and Reverseit continue to offer fixed rate products in Illinois.
