Articles by ReverseReview Magazine

Fed Chairman Bernanke Testifies Before Budget Committee

Chairman of the Federal Reserve Board, Ben Bernanke testified before the House Budget Committee on the Economic Outlook and Monetary and Fiscal Policy.  While noting a strengthening economic recovery, he discussed concerns about unemployment and projected debt and deficit levels. Benanke attributed the building economic recovery on "the stabilization of the financial system, the effects of expansionary monetary and fiscal policies, and the strong boost to production from businessess rebuilding their depleted inventories."  Consumer spending picked up in the fourth quarter at an annual rate over 4% and business investement appears to have increased robustly.       Although construction
Read More

Shaping GSE Reform

In a speech at the American Securitization Forum Conference, Representative Scott Garrett, Chairman of the House Financial Services Subcommittee on Capital Markets, began to lay out the goals for reforming housing finance and the Government Sponsored Entities (GSEs), Fannie Mae and Freddie Mac. Noting that 95% of the U.S. Mortgage market is current being financed by the federal government, Rep. Garrett said that reform needs to be led by four key objectives: 1.) Protect taxpayers; 2.) End the bailouts; 3.) Get private capital back in our mortgage markets; and 4.) Decrease government exposure to housing.  Realizing that there many
Read More

AAG Settles into New Location

Following what they termed their most successful year since being founded in 2005, American Advisors Group (AAG) has relocated their corporate headquarters from Irvine, California to new facilities in the nearby city of Orange. AAG took up residence in the new 22,000 square foot office over the weekend, which is intended to house the sales and operational support necessary to accommodate anticipated volume growth.  They expect the new facility to be able to house over 100 loan officers. "I look towards 2011 with a great sense of optimism," Reza Jahangiri, CEO stated. "We intend AAG to secure its position
Read More

HUD Updates Counseling Guidance

The Department of Housing and Urban Development (HUD) released Mortgagee Letter 2011-09 to update guidance of the counseling documentation and fee requirements, including provisions that allow for increased counseling fees. In regard to fees, the letter clarifies documentation and record keeping requirements for agencies that charge fees, including waiver requirements for certain low income clients.  Counseling agencies are required to waive a counseling fee when they have sufficient documentation to demonstrate the client's income is below 200% of the Federal Poverty Level. Such documentation must be in the form of Social Security payment stubs, income tax returns for prior
Read More

CFPB is "Open for Suggestions"

The Consumer Financial Protection Bureau (CFPB) launched their website last week and announced they are now "Open for Suggestions."  In the introductory video, Elizabeth Warren, special advisor to the President responsible for setting up the new bureau, said the goal of the CFPB is to put a "new cop on the beat" to enforce the laws on consumer financial products. Although the CFPB is still in the process of being set up, Warren notes that they wanted to get the website live for "one very important reason, to start a conversation with you."  It is widely believed that Warren
Read More

Its Official: BofA to Shift Resources to Core Operations

In an official release, Bank of America has announced their plans to exit the reverse mortgage origination business.  According to the announcement the restructuring will allow Bank of America Home Loans to focus on its core mortgage operations. “We made the strategic decision to exit the reverse business due to competing demands and priorities that require investments and resources be focused on other key areas of our business,” said Doug Jones, Consumer Sales and Institutional Mortgage Services executive for Bank of America Home Loans. Under the wind down, BofA will continue to serve existing reverse mortgage customers and those
Read More

Congress Begins Hearings on GSE Reform

With much talk in Washington about reforming the budget and cutting costs, the Government Sponsored Entities (GSEs), Fannie Mae and Freddie Mac have been in the cross hairs of legislators on both sides of the political isle. Capital Markets Subcommittee Chairman Rep. Scott Garrett has announced hearings will begin with the Subcommittee on Wednesday, February 9th. The goal of the hearings, according to Rep. Garrett is to examine what Congress can do right now to protect homeowners from the cost of the bailout of the two GSEs.  "With a price tag of $150 billion and counting," Garrett said, "Congress
Read More

BofA to Bow Out of Reverse Mortgages

According to several sources contacted by the Reverse Review, Bank of America (BofA) is preparing to officially announce their plans to close their reverse mortgage divisions in all channels: retail, correspondent and wholesale. Although BofA has yet to release an official statement and has not responded to requests for comment, several industry insiders have confirmed that they announced their plans to employees and select partners today. Last year, BofA closed their wholesale channel for forward mortgages, but at the time, announced an on-going commitment to the reverse channels. Few details are currently available, and this report has yet to
Read More

Retail Falls, but Signs of Growth

Reverse Market Insight (RMI) points to an interesting contradiction in their latest Retail Leaders Report for January 2011.  Although volume decreased by 1.4% from December and by 15.3% from the previous January, RMI sees signs of year over year growth by March of this year. Most lenders would be concerned about a January that lagged behind a holiday shortened December, especially when it also trails the previous year.  Raising additional concern is the number of lenders participating in January increasing by 18.9% over December.  However, RMI points to two components that fuel their optimism of annual growth in volume. 
Read More

CNN Money: Saver Makes HECM More Viable

In Money Magazine's "Ask the Expert", senior editor Walter Updegrave responded to a reader question about using a reverse mortgage as line of credit because they could use additional money.  Updegrave indicated that this can be a good way  to turn home equity in to additional funds to supplement Social Security and other retirement assets to make retirement more enjoyable, with several caveats. As has been common with other recent reviews of the HECM program, the article points to the HECM Saver as making the loans more palatable due to the reduction in up front mortgage insurance from 2%
Read More