Wells Fargo Reverse MortgageWell Fargo Reverse Mortgage
Former sub-prime loans officer eyes boom Senior markets
From 12,000 to 15,000 repressed mortgage providers may begin seeking work in the burgeoning reverse mortgage markets, an increasing home equity lending option for home-owners 62 years of age or older, Goldman, Sachs & Co. GS.N and Wells Fargo Home Mortgage senior managers said at a mortgage meeting.
"Jeffrey Taylor, Wells Fargo's VP of senior product, said during a meeting of the Mortgage Banking Association in New York, "A percent of them will switch to reverse mortgage lending, but it's very special. Fears some banks that the fast growing mortgage markets could make reverse mortgage lending susceptible to scams and heightened legal disputes, which has afflicted sub-prime lending - mortgage lending for those with poor lending history.
"If you look at what's going on in the sub-prime mortgage markets, these are the kinds of people who are really suited to pursue reverse mortgages," asked Rolf Edwards, a Goldman, Sachs & Co. New York VP. The problems in the US mortgage markets are a central issue as the residential sector has decelerated and the failure rate of the most risky sub-prime exposures has risen in recent years.
There are at least 20 sub-prime mortgage providers that have already disappeared from the books. Meanwhile, the number of state-insured reverse mortgage products has jumped from 7,781 in 2001 to 76,351 in 2006. HECM loan or home equity conversion morning debt accounts for 90 per cent of these US bonds, according to the National Reverse Mortgage Providers Association.
BAC.N in April said it would agree to buy Seattle Mortgage Co.'s reverse mortgage deal, making it the third biggest US mortgage group. Wells Fargo has about 700 credit specialists specializing in reverse mortgage lending. Taylor said the other 10,000 credit clerks could not grant the credits due to their complexities. Reverse mortgage rates are favored because older homeowners are able to type the home equity Loan to help settle health bills or increase pension earnings while they stay in their houses.
As a rule, the mortgage is repaid with gains from the house sales, either when the owner of the house passes away or when the house is moved. Greater protection for consumers and better information and advice will be needed as the product reaches maturity, says Vanessa Farnsworth, a Senior Executive at Bank of New York Mortgage Co.