World Alliance Financial Corp., a reverse-mortgage lender that operates the Senior Lending Network announced today that it will no longer accept new loan applications, and will begin scaling back its operations effective immediately.
"World Alliance Financial is proud of its history of providing, through its reverse mortgage products, financial resources to seniors to help them achieve economic well-being that they could not otherwise attain. We very much regret that we can no longer accept new loan applications," said World Alliance Financial Chief Executive David Peskin.
"To be clear, this decision will have no impact on our current borrowers, holders of GNMA securities that we’ve issued and our partners in the Senior Lending Network. We will continue to service outstanding loans, as well as fulfill all of our other obligations. Our core infrastructure will remain fully intact while we seek other opportunities,” Peskin said.
Mr. Peskin also noted that the Senior Lending Network will direct those who have applied for loans but have not yet been cleared for closing to alternative lenders.
WAF’s parent company, KBC Group has been hit hard by the downturn in the economy, receiving government relief three different times adding up to $41.5 billion in financing and guarantees to recover from disastrous mortgage bets that its financial engineers and traders made.
KBC has been shedding its US holdings, earlier this year EquityKey was repurchased by its founders after it cut off funding for its product which provided a cash advance on a house in exchange for the right to share in the homes future appreciation.
Viviane Huybrecht, spokesperson for World Alliance’s Belgian parent company, KBC Group, said “We greatly appreciate the efforts of our colleagues at World Alliance. However, as the Group has made clear in prior announcements, it is conducting a group-wide, strategic review of its operations and deployment of capital, and as part of that process has decided to no longer make funding available for new reverse mortgages.”
Huybrecht added, “Both the KBC Group and World Alliance management are working diligently to find a buyer or capital partner for the business, but if we are unsuccessful we will begin to slowly wind it down. In the interim, we will be retaining a core group of employees to ensure that World Alliance Financial is able to honor all of its current obligations, and will provide support services to former sales and support staff to help them through this difficult transition.”
