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Lender Lead Uses Technology to Offer Innovative Reverse Mortgage Pricing By Anthony Garritano MELVILLE, NY-As the subprime market goes away, a lot of lenders are looking to get into FHA, reverse mortgages and construction lender. Due to its tech-savvy nature Lender Lead Solutions here has been able to react quickly and offer its brokers better pricing on reverse products. Lender Lead Solutions has introduced a home equity conversion mortgage based on the Libor index. Lender Lead touts that it is the first lender in the reverse mortgage industry to announce a product based on this particular index instead of the Constant Mature Treasury rate. "Making the transition makes perfect sense, the Libor-based HECM provides brokers added margins while giving them the flexibility to structure rates and loan closing costs to meet the individual needs of borrowers," said David Peskin, chief executive officer of Lender Lead Solutions. "The migration to the Libor index will be the next big trend in the reverse mortgage industry. Its attractive pricing is better for our brokers and creates less interest rate risk for lenders like us." Currently, HECM loans are priced using the CMT rate while banks borrow money based on the Libor index, making it a challenge to effectively price the loans because of the difficulty to predict the future spread of the CMT and the Libor index. The rollout of the HECM loans based on Libor index will keep brokers from being exposed to market volatility and allows them to increase flexibility and profitability. "Up until 2007, all HECM loans were originated using a 150-basis-point margin. In January, that all changed when the industry developed flexible pricing margins," stated Mr. Peskin. "Today more than 60% of the HECM loans originated have a 100 basis point margin. However, as a result of the current secondary market environment, lenders have either had to reduce their payout to correspondents or discontinued offering the lower margin options such as the 100. Now with the launch of the HECM Libor alternative, a lender can offer clients a lower margin, like the 100, and still be compensated for their efforts." The Department of Housing and Urban Development approved the use of the LIBOR indexes for all FHA ARM and HECM products on Friday, July 20, 2007. HUD issues Mortgagee Letters to inform lenders of changes in FHA operations, policies and procedures. Lender Lead Solutions is waiting for the final Mortgagee Letter to be distributed prior to formal rollout of the LIBOR-based HECM product. "Our product innovation team's development of the LIBOR-based HECM is very timely for the industry; it allows for greater profitability for our brokers and the added flexibility needed to run a successful business," said Jean Noble, executive vice president of Lender Lead Solutions. "As the mortgage environment changes, Lender Lead Solutions has been able to adjust to those changes. This product is truly unique to the industry, and we anticipate the adjustment will help our brokers become more profitable while continuing their normal flow of business."

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