Broker Programs Flourish

Brokers have a new reverse loan from Lender Lead Solutions, it’s first fixed-rate Home Equity Conversion Mortgage product. The New York-based company announced Tuesday that the product has maturity conditions similar to those of a traditional HECM, including no loan repayments as long as the borrower pays homeowner’s insurance, real estate property taxes and does not vacate the home for more than 12 months.

Prior to the fixed-rate loan, Lender Lead introduced in December its LIBOR 85 product, which at an LIBOR 85 basis point margin pays a premium to the broker and provides increased liquidity to the borrower. The loan is in addition to its October-launched LIBOR 75 Flex Margin Advantage with margins as low as 75 basis points and which it says was the first LIBOR-based reverse loan offering.

Financial Freedom Senior Funding Corp., which claims its October-launched HECM LIBOR Monthly 65 was the industry’s first LIBOR-based HECM, announced Thursday the availability of its HECM Monthly LIBOR 75 and HECM Monthly LIBOR 85. The Irvine, Calif.-based lender began taking applications on Dec. 28 for the two new products, which have an interest rate based on the 1-month LIBOR index plus the margin and provide borrowers with all the features and benefits of other HECM reverse loans.

“In today’s rate environment these additional margin options on HECM Monthly LIBOR reverse mortgages will give borrowers the option to realize a somewhat higher cash benefit, a larger monthly payment, and, in some cases, a reduced origination fee at an interest cost that is slightly higher than the HECM Monthly LIBOR 65, but, based on historical index values, is lower than the industry-dominant CMT-based HECM product,” Financial Freedom said.

Liberty Reverse Mortgage launched its first proprietary reverse mortgage in early December, according to an announcement. The Liberty Preferred is a jumbo loan for properties valued up to $4 million and has no mortgage insurance premium. And “aggressive premium pricing allowing brokers to offset borrowers’ closing costs,” the Sacramento, Calif.-based company announced.

Generation Mortgage recently enhanced its Gen Plus jumbo reverse mortgage with Generation Plus Estate Guard, a feature that lets borrowers halt interest accrual on their homes depending on real estate market conditions. If the borrower’s home value is significantly less than the loan balance, the lender suspends the interest accruing on the loan. If a future appraisal indicates the home value has risen, the interest rate will resume. The feature had not previously been available to jumbo reverse borrowers and has a U.S. patent application pending, the Atlanta, Ga.-based lender announced.

Midwest Capital Corp. said it has a new, national, correspondent commercial lending program that is designed to give brokers the ability to originate commercial loans that often better than traditional financing options. The Indianapolis-based non-bank lender says it provides both conventional and U.S. Small Business Administration 504 long-term commercial mortgages, ranging from $1 million to $10 million, to small- and medium-size companies.

“Historically, brokers were confined to offer commercial loan products to non-traditional commercial borrowers at high interest rates,” said Midwest President Steve Young in the announcement. “Our program will open their opportunity to pursue bank-quality transactions and offer their commercial borrowers more competitive pricing and loan structures that rival, compete with and often beat out traditional financing options.”

YSP Loans, which offers commercial loans of $250,000 to $15 million, is building its first correspondent network. The Griffin Capital Funding unit will be adding up to 50 brokers as correspondents to cover all states, as they are licensed in all 50. YSP will be hosting weekly one-hour Web seminars for 10-week periods to familiarize residential brokers with commercial lending and its programs. With the addition of the correspondent program, volume of about $115 million in 2007 is expected to grow by $100 million this year, the company told MortgageDaily.com.

Union Bank of California N.A. recently added the Two Step Mortgage to its roster. The loan features a 40-year term with a fixed rate for the first 15 years and a one-time adjustment for the remaining term. Borrowers are allowed to make interest-only payments for those first 15 years. Since borrowers must qualify at an interest rate that’s higher than their initial rate, a good financial management track record and proven ability to pay are required, according to an announcement.

The bank is currently offering the product to its existing brokers in California, Oregon and Washington, Craig Cole, Union’s senior vice president and division manager for residential lending, told MortgageDaily.com today.

“We’ve gotten a very popular reception,” Cole said, noting the bank has taken in over $200 million in new applications for Two Step since launching it in November.

Stenton Mortgage should be going live sometime soon, as an early December 2007 announcement stated the new wholesaler would launch in early 2008. The Blue Bell, Pa.-based company will use INTEGRA’s Destiny loan origination software as the hub of its operations, which will initially focus on the Federal Housing Administration and Alt-A markets, according to the announcement.

“Stenton Mortgage is in the process of setting up operations and obtaining licensing to provide mortgage products direct to the consumer and mortgage broker markets,” the company’s Web site read, as of Thursday evening. “Our goal is to offer home equity financing, from subprime through Alt-A, in as many as 38 states.”

Next week, Right Stop Mortgage LLC expects to go live, inviting potential brokers clients to take a “test drive” in the company’s pre-qual engine. The Michigan-based wholesale lender, which will run an entirely Web-based business model, will start by offering hard money loans to brokers in Florida, but will spread availability of these to Utah, Arizona, Nevada and Colorado in the next three weeks. Some subprime programs are still in the process of being set up and will also be out in a few weeks, Right Stop manager Bob Rubin told MortgageDaily.com Thursday.

Right Stop recently announced its new products would feature loans for credit scores as low as 580 with no down payment, stated-income loans for self-employed borrowers with 5 percent down, and hard money product that has a “void-able” prepayment penalty.

The loan-to-value on the hard money product with void-able prepay penalty is 65 percent and does not have a credit score minimum, Rubin said in an e-mail statement. The company will also unveil a wide variety of higher combined LTV higher credit score programs, where it will issue a high LTV loan with its own second, many higher credit score stated income verified asset and stated income stated asset programs.

“We will limit the number of mortgage brokers that we do business with and are very selective in our approval process,” Ruben said in a December announcement, which highlighted the company will use fraud prevention services and require brokers to sign an acknowledgement that any fraud will be prosecuted to the highest degree.