Posted by: cfigueira | April 19, 2010

Does Elimination of the Origination Fee Benefit The Reverse Mortgage Industry?

Posted To: Community Commentary

Just like any business, mortgage brokers have expenses to run their business. For reverse mortgage brokers, we have to cover loan officers, staff salaries, administrative costs, office space, utilities, taxes, health insurance, marketing expenses, processing, underwriting, etc. (Note that processing and underwriting fees are generally additional fees on conventional loans but have to be included in the origination fee on FHA reverse mortgage loans.) HUD regulates the fees that can be charged on the reverse mortgage including the origination fee. The guidelines are 2% on the first $200,000, 1% on the balance thereafter with a maximum of $6,000 and a minimum of $2,500. For many years the origination fee was the only way reverse mortgage brokers received funds to cover their business expenses…(read more)

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