Lender Reduces Rates on LIBOR Loans

Financial Freedom, a subsidiary of OneWest Bank and a lender and servicer of reverse mortgages is making a reduction in the interest rate margin on its LIBOR-based reverse mortgages and the introduction of the Financial Freedom Senior Saver, a fixed-rate reverse mortgage which eliminates origination and servicing fees. The company, based in Irvine, Calif., says changes to both loan programs dramatically reduce costs and provide significantly more cash benefit to borrowers. The Financial Freedom Senior Saver is a fixed-rate Home Equity Conversion Mortgage, which waives the origination and servicing fees normally paid to lenders, offering seniors a typical savings of $3,500 - $10,000 in costs on a reverse mortgage. Financial Freedom has also reduced the interest rate margin on the Financial Freedom HECM LIBOR from 250 basis points to 175 basis points. On a typical $150,000 reverse mortgage, the reduction of the margin will provide the borrower with additional benefit of approximately $10,000. The Financial Freedom Senior Saver does not eliminate all closing costs. Borrowers are still responsible for the mortgage insurance premium required on HECM loans under HUD guidelines as well as third-party costs that include title search and insurance, appraisal, inspections, recording fees, mortgage taxes, and credit checks.