Finance of America Reverse introducing second-lien HECM alternative
Finance of America Reverse is offering a new second-lien alternative to the Federal Housing Administration's Home Equity Conversion Mortgage that can be placed on a property with a pre-existing first-lien loan.
"We know that home equity is a critical piece of a retirement planning strategy. We also understand that reverse mortgages may not be the first tool people over 62 reach for when considering how to integrate this important asset into their wealth management plans. Now they can have the flexibility of access to additional funds and the protection of a reverse mortgage without giving up the choice to leave existing financing with low rates in place," Kristen Sieffert, president of Finance of America Reverse, said in a company press release.
The private-label HomeSafe Second loan is available for properties valued at up to $10 million. A maximum of $4 million in loan proceeds are available. The proceeds can be used to repay other types of debt, with the exception of the first mortgage.
Housing wealth for homeowners age 62 and older recently rose to $6.9 trillion in the second quarter of this year from more than $6.4 trillion a year ago, according to the National Association of Reverse Mortgage Lenders. It also was up from $6.8 trillion in senior home equity the previous quarter.
"The numbers tell a reassuring story about housing wealth in an era when large numbers of retirees and near-retirees fear running out of money before the end of their lives," Steve Irwin, NRMLA's executive vice president, said in a press release.
Proprietary alternatives to the FHA's reverse mortgage product were largely discontinued after the U.S. housing bubble burst during the Great Recession, but they have been making a comeback recently.