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Special Reports
Home Equity Lending
New Product Lets Seniors Cash in on High-end Homes
By Amilda Dymi
IndyMac Bank subsidiary Financial Freedom Senior Funding Corp., one of
the largest originators of reverse mortgages in the country, has launched the Cash Account Advantage, a newly enhanced
jumbo reverse mortgage option that significantly increases loan limits applicable in high-end markets.
According to Financial Freedom, the new product was designed to serve senior owners
of higher-end value properties nationwide offering "the highest principal lending limit in the industry."
It represents an addition to Financial Freedom's menu of cash-account products.
Access to home equity lines of credit through reverse mortgage loans has long
been a dependable tax-free financial resource for seniors while retaining homeownership. However, most products
limit the amount of their home equity into usable cash. Financial Freedom's Cash Account Advantage product allows
for double or triple the percentage of cash access applicable so far in similar loans.
"With the Cash Account Advantage, a 65-year-old senior can access 75% more
home equity, while a 75-year-old can access 47% more home equity than with our previous offering," said Financial
Freedom CEO, James Mahoney, upon the release of the enhanced product.
The company said Cash Account Advantage adds a new option to the existing Financial
Freedom menu of reverse mortgage products, such as HECM, which while being one of the most popular Financial Freedom
loans, does not serve seniors whose properties are valued anywhere from $450,000 to $750,000 who "are disadvantaged."
The Cash Account Advantage eliminates that barrier giving borrowers the possibility
to access a higher percentage of their home equity, along with the option to avoid closing costs or origination
fees if they decide to receive 100% of their loan proceeds in a lump sum at the time of loan closing. Borrowers
also have the option to receive their cash benefit as a line of credit or a combination of cash with a credit line.
Property types eligible include single-family detached, manufactured, condo and
one-to-four rental units if one unit is owner occupied. Furthermore, CAA requires seniors to receive counseling
from an independent counselor, so they fully understand the terms and conditions of the deal.
"The Cash Account Advantage provides seniors, especially younger seniors
with higher value homes, greater access to their home equity and more choices on how to take advantage of the benefits
of a reverse mortgage," noted Mr. Mahoney in a company release.
One benefit is that borrowers retain title to their property, and they cannot
owe more than the value of the home. As a rule, "unless a material default occurs, the loan becomes repayable
when the borrower sells the home or permanently moves out," so the loan does not have to repaid before that.
Another Financial Freedom benefit is its "side-by-side comparison of products
to help the borrower chose" the loan that best fits their needs, the company said.
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