NestWorth Emerges With A New Reverse Mortgage Alternative Product

imageIn Home Equity Niche Freezes, American Banker Journalist Maria Aspan writes about how shaky capital markets have hurt the growth of equity release products from EquityKey and Rex & Co.  The products, which are often sold as an alternative to reverse mortgages, allow homeowners to receive cash in exchange for a share of their home’s future appreciation.

Over the past year, these types of products have become more popular but the turmoil in the financial markets have caused both companies to suspend funding for new applications.  While it’s unclear when either company will resume business as usual, a new player named NestWorth has emerged and is funding deals in the San Francisco, Seattle, and Portland areas.

"I would think anyone who’s relying on institutional funding in the capital markets right now is having more problems than a company like ours, which is smaller and less reliant on the capital markets," said Graham Williams, NestWorth’s president and chief executive. "We could clearly grow our business more quickly if the capital markets were functioning in a normal fashion, but at this stage in our development, the capital markets aren’t necessary."

Williams, who was Rex’s chief operating officer until October 2007, said NestWorth relies on private investor pools and bank financing and is "very comfortable in our ability to continue through next year."

NestWorth’s website describes its product as a better reverse mortgage alternative and looks to be similar to Rex’s agreement.  Below are the guidelines for NestWorth’s product:

  • All participants must be legal owners.
  • Available to homeowners 60 – 80.
  • Property must be owner-occupied, one unit, single family, detached residence (no condominiums).
  • Second homes are acceptable.
  • Home value less than 3 million.

If you want to run a scenario you can check out their calculator here. To read a copy of the article from American Banker click the link below.

Home Equity Niche Freezes (Subscription Required) 

Leave a Reply

Your email address will not be published. Required fields are marked *

Most Popular Articles

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please