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Why Originate Reverse Mortgages?
 

A reverse mortgage is an FHA product that relieves your company from the underwriting, insuring and hedging risk. There are no income, employment, cash to close or credit requirements. Proof of Borrowers’ ages and property condition and value is all that is required. Bankruptcies, collections, and 400 credit scores don’t matter. Reverse Mortgages are the perfect vehicles to create a specialized practice. Currently there are very few originators involved in this market. That won’t be true in a few years from now. You can turn your clients into your “Customers For Life”. The Reverse Mortgage is a natural progression in the life of a homeowner. From first-time home buyer, refinance, to home improvements. The Reverse Mortgage fills the next stage in helping your clients more fully enjoy retirement.

 
How To Originate Reverse Mortgages
 

Any FHA-approved lender who meets the requirements can become a reverse mortgage professional. FML will assist potential Financial Freedom partners in obtaining their FHA/HUD approval prior to becoming a correspondent lender with Financial Freedom. To start the process, review the approval requirements for obtaining your FHA license. A loan correspondent approval is all that is necessary to become a correspondent lender with Financial Freedom. If you meet the requirements, the next step is to file an online application and we will begin expediting your FHA/HUD approval.   Approval Requirements    Apply Now

 
The Market
  • Over 22 million senior homeowners are in the nation today.
  • 60% of the national population is 65-70 years of age.
  • 85% of senior homeowners want to remain in their home for the balance of their life (AARP study)
  • There is currently less than an estimated 1% market penetration, with Financial Freedom funding approximately 50% of the total national production. This leaves approximately 99% of the potential loans that fit the profile available to those that have the best marketing strategy.
  • There is an estimated $3 trillion in home equity on properties owned by senior citizens that qualify for the program.
  • 5,574 people in the U.S. turn 65 years of age every day
  • Funding volume in 2003 was about double that of 2002 and appears to be a similar increase this year over last. Current monthly fundings nationally is about 3,000 loans per month, with Financial Freedom funding 1,700 loans in June 2004.
  • According to a recent article in the Consumer Reports Money Advisor, “More seniors are in the red. Personal bankruptcy filings have surged 10 percent to 1,625,208 during the 12-month period ending December 31, 2003. Seniors, mired in high levels of credit-card debt, are the fastest-growing age group appearing in bankruptcy court. The credit-card debt carried by those 65 or older jumped 89 percent between 1992 and 2001, according to a report released in February by Demos, a nonprofit public-policy group based in New York.” There is little doubt that many of those included in this survey would have benefited from a Reverse Mortgage, proof of the lack of awareness on a national scale.
  • According to a FNMA study, Seniors taking a Reverse Mortgage have a 90% satisfaction rate.
 
Industry Information
NRMLA
National Reverse Mortgage Lenders Association (NRMLA) is a membership organization, based in Washington, DC for lenders, vendors, and other companies that originate, service and/or invest in reverse mortgages.
AARP
Association for the Advancement of Retired Persons. With over 35 million members, AARP is the leading nonprofit, nonpartisan membership organization for people age 50 and over in the United States.
Financial Freedom
Financial Freedom was instrumental in the development of the reverse mortgage concept in the United States back in the late 1980s. Today, they are the nation's largest reverse mortgage specialist, having helped tens of thousands of seniors enjoy the benefits of this important financial tool.
HUD Housing Counseling
HUD sponsors certain approved housing counseling agencies that in turn provide counseling services to citizens for free.
Senior Resources
Dedicated to helping seniors and their families with accurate and up-to-date information on senior housing options, finance, insurance and related lifestyle issues.
 
Reverse Mortgage Products
More that 90% (as high as 95% in many markets) of the loans funded will fall under the FHA product HECM (Home Equity Conversion Mortgage). There are two ARM options, one monthly adjustable and one annual adjustable, both based on an index of the one-year Treasury Bill. Appraised value (used to calculate the amount of proceeds) is limited to the market FHA maximum lending limit.
A portion of those remaining Reverse Mortgages funded fall under the FNMA product, Fannie Mae Home Keeper. This is also an ARM product based on the one-month CD index. The value (used to calculate the amount of the proceeds) is limited to the current FNMA lending limit.
Financial Freedom also offers the Financial Freedom Cash Account with virtually no limit on the value of the home used in calculating the proceeds. This is an ARM product based on the six-month LIBOR. This product is not offered in all states and, currently in our Southwest Region, is not offered in Texas, Kansas or Oklahoma.
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