Live Well Brings Back Annually Adjusting Reverse Mortgage

On the heels of a ruling this week by Ginnie Mae indicating it will limit the types of fixed rate reverse mortgages it allows to be pooled into HECM-backed mortgage securities, Live Well Financial announced today it is rolling out a new product. 

The annually adjusting loan resembles past products in its interest rate adjustment feature, but adjusts based on LIBOR rather than CMT-based loans of the past. Further, the interest rate is capped at 5% above the initial rate with annual rate increases limited by an additional 2% cap. 

“This product truly provides borrowers and brokers the best of both worlds,” says Jim Cory, senior vice president of Live Well. “Borrowers get to take advantage of today’s low interest rates with the peace of mind of knowing that the maximum interest rate will remain stable if rates climb. We’re excited to offer this as an alternative to the fixed rate product and believe this will be the best choice for borrowers and brokers.”

The FHA-insured open-end loan is being marketed as the “HECM Hybrid” under Live Well’s branding, though it is an adjustable rate loan—allowing borrowers to draw down on the full principal limit under HUD guidelines—rather than a combined fixed-rate and adjustable-rate concept lenders and the Department of Housing and Urban development have referenced during the course of ongoing reverse mortgage product changes.

Live Well anticipates future changes among its product offerings based on market developments. 

“We want to continue to innovate and be assertive and use the guidelines we have today,” says Bruce Barnes, Live Well executive vice president told RMD. “We will continue introducing products whether HECMs or proprietary products as there’s a need or a desire for them.” 

Written by Elizabeth Ecker

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