Reverse Mortgage Daily, June 29th, 2010

Taking a conservative approach to writing reverse mortgages, Sun West
Mortgage, Cerritos, Calif., prefers to be careful on the front-end and
“aggressive” on the servicing side, according to Pavan Agarwal,
vice-president of the family-owned firm. Agarwal, who joined the company
right out of college, says Sun West is “proactive in servicing,”
particularly when taxes come due,” calling borrowers to remind them.
“Most seniors don’t default because they intend to,” Agarwal notes,
“but, rather, they forget to make the payments. It’s mostly a training
and re-education” issue, he says.

Not surprisingly, origination volumes are down lately at Sun West,
which got into the reverse mortgage business in 2004. Agarwal tells RMD
that the company has experienced a 30 to 40 percent reduction in HECM
volume this year due to the reduced principal limit factors and a
depressed housing market. “However, Sun West has more than compensated
for the drop through an increase in its FHA forward and commercial
lending channels,” he assures listeners.

However, the generally depressed housing market is an area of
concern, says Agarwal, explaining that reverse mortgage originators
should be beware of investors who attempt to put a senior in an
upside-down property. “If you originate a loan like that,” he warns,
“you [end up having] seniors who may not be committed to the property;
who may never have owned a property before and doesn’t understand what
the responsibilities of a homeowner are.”

Read more of this article.

About Reverse Mortgages:  Conservative approaches are all well and good, but generally speaking, the best approach to something like a reverse mortgage is to get all of the options available to you on the table.  NewRetirement can help you do that.