Reverse mortgages

The loan, dubbed Homesafe Second, will allow borrowers 55 and older to tap their home equity via a second mortgage.

While the company's long-term issuer default rating has slipped a little, affiliates of Blackstone that have a higher one back the reverse mortgage player.

More than one securitization per month resulting from multiple disbursements of a single loan will be permitted beginning Oct. 1, the guarantor said.

The company, which recently divested in the forward mortgage business and sold off its title services unit, reported a $222.5 million loss.

A second quarter profit followed two fiscal periods in the red, but the firm had to overcome a $33 million negative mortgage-servicing rights valuation.

Under new terms of its program, the Aloha State will also extend assistance to reverse mortgage holders as well as some borrowers with nondelinquent loans.

The firm's reverse mortgage arm combined with the newly acquired American Advisors Group will make the parent company the largest player in that lending space, executives said.

This deal will allow PHH Mortgage to substantially increase the number of reverse MSRs it handles on an outsourced basis.

Mission-driven entities will have priority on 50% of loan pools secured by Home Equity Conversion Mortgages.

The company is launching a training course to certify its loan officers on HECM loans.

The change may decrease the amount of time that a servicer is required to hold a loan on their balance sheet.

The company sold off several segments of its business last year and also completed four securitizations of reverse mortgage loans as it fully commits to the 'retirement home-equity market.'

Interest rate increases and economic concerns led the government entity to lower the required amount from $1 million to $250,000.

While reverse mortgages allow older homeowners the opportunity to draw on home equity with minimal risk, problems arising from flaws in program structure are causing headaches for borrowers and issuers alike, according to recent reports.

This move comes at a time when the largest HECM producer sold its operations to a rival and another filed for bankruptcy.

After volumes peaked at their highest in over a decade in March, the reverse mortgage market ended the year with a bankruptcy and merger involving its largest companies.

The Lansing, Michigan-based firm was awarded the contract this spring and takes over from Novad Management Consulting, which had previously serviced government-held HECMs since 2014.

The deal will close for $10 million in cash, plus the right to purchase nearly 33.9 million shares of common stock.

The year-end expiration date on two temporary measures designed to help older borrowers were pushed to December 2023.

But executives put a sunny spin on it, saying that its recent exit from forward mortgages will allow it to leverage reverse lending, where tailwinds will lead to profitability next year, management said.