Bank Of America Reverse Mortgage

Bank of America reverse mortgage practices began in May 2007 when they acquired Reverse Mortgage of America from the Seattle Mortgage Co. The purchase was made for an undisclosed amount and it was finally concluded near the end of June.  The new unit was placed under Bank of America's home equity group, which is a frontrunner in the home equity market, with over $90 billion in outstanding balances.  This entry into the market propelled Bank of America into the third largest company offering reverse mortgages, trailing only Financial Freedon and Wells Fargo and Co. 

The timing of the acquisition by Bank of America was very interesting in that the housing market was very precarious and an increasing number of consumers were second guessing their actions of tapping into their home equity.  While the housing market was in the biggest slump in over 15 years, housing value is still up nearly 50% since the start of the decade, which means there is still plenty of equity for the current home owners.  There is only a growing reluctancy to tap these funds due to uncertainty surrounding the economy and also the tightening lending guidelines. Bank of America does not seem to be bothered by these speculations.

A reverse mortgage is a loan aimed at senior citizens and it allows funds to be taken out against a home's equity and through which borrowers receive the dollar-value of their property via an untaxed lump sum or monthly payments. Borrowers must be at least 62 years old to be eligible, but the lending 'sweet spot' is really closer to 80 years old. With finance costs typically ranging from $25,000 to $50,000 on a $250,000 loan, most people are usually around that age by the time their equity has matured enough to make the fee-to-benefit ratio worth it.

Bank of America officials view was that reverse mortgages have a unique lending criterion since they involve a borrow-base that is relatively isolated from the macro concerns of the mortgage industry. There was an increase in reverse mortgage lending during the first quarter of 2007, according to industry statistics. Such lending contributed to $44 million worth of mortgage income and a 26% return on equity from overall mortgage production.  Bank of America reverse mortgage unit hopes to tap into this rising market and to provide a competitive product for its customers and a solid profit for its investors.




Reverse Mortgage News:
Reverse mortgage is expensive form of borrowing
Q: I just checked on a reverse mortgage. I am 63, own my home and have no immediate family. My home is worth about $137,000. I have an outstanding home-equity loan for $10,500. The bank appraised my home at $125,000, because I have the outstanding equity loan. The interest rate is currently 5.49 percent with a mortgage insurance rate of 0...


Introduction to Reverse Mortgage | Finance Info Blog
Author: Lizza Browne It's an all-natural occurrence in the life cycle of a person to switch focus corresponding to what their ages are. In the case of...


Reverse mortgages: badly judged or just misunderstood?
The reverse mortgage market has faced a great deal of criticism over the years. Angela Faherty looks at the issues facing the sector and asks whether it can ever shake off its bad reputation...


Pros Ands Cons of a Reverse Mortgage | mortgage
There are many mortgage products in the market but reverse mortgage is a rather new mortgage product. In such a mortgage, the home must be paid off in the first place to receive a reverse mortgage. If the home is not paid off, ...


Texas Reverse Mortgage will help lead a tension-age | raestate
these days the establishment of various types of loans of different products and loans which have been introduced recently. All these services and offers...


FHA plans to revamp HECM for new reverse mortgage product - Housing Wire
The Federal Housing Administration (FHA) will modify its Home Equity Conversion Mortgage (HECM) product to provide a more affordable reverse mortgage for seniors looking to tap the equity of their homes ...


Using The Reverse Mortgage Calculator To The Fullest | Mortgages
How do you get the most from a reverse mortgage calculator? More importantly, how do you use it? The benefit to using an online calculator for your reverse mortgage is you won't have any pressures from a sales person urging you to do a ...


Generation Mortgage Offers New Jumbo Reverse Mortgage Loan for Homes up to $6 Million - StreetInsider.com
Exclusive Generation Plus fixed-rate product provides senior mortgage loans with higher payout Atlanta, GA (Vocus) September 5, 2010 -- Generation Mortgage Company„˘, the largest privately owned retailer and ...


Cheaper Reverse Mortgages May Be Coming
New federal loan, if adopted, would eliminate up-front insurance payment but lower homeowner proceeds...


Bargaining For The Best Reverse Mortgage Prices | Real Estate .
Inverted home loan rates aren't various form conventional home loan rates, and when you're applying for a inverted mortgage you ought to make every effort to discover the lowest reverse mortgage rates you possibly can...


Mortgage lender » Blog Archive » A Reverse Mortgage Calculator .
The most advanced process mortgage loan calculator details including the total amount to be obtained with reverse mortgage, and if you want credit as a line in monthly installments or as a payment in cash only. ...


Google
 



Technorati Tags: , ,