Bank of America Reverse Mortgage Jumbo Program Suspended
First it was Countrywide, and now its parent, Bank of America has officially suspended their jumbo reverse mortgage program.
The leading jumbo reverse mortgage lender emailed its lending partners today with the announcement. It appears that nationwide declining property values and the resultant lack of investor interest in mortgages has killed the program, at least until secondary market conditions improve.
Fortunately, Financial Freedom has made no such announcement regarding their jumbo reverse mortgage product. And there are still a few other smaller players offer their proprietary reverse mortgage programs. Of course, Fannie Mae is still funding the FHA Home Equity Conversion Mortgage (HECM), but theses conforming loan amounts are limited by the home value cap of $362,790 in most high-value counties.
This development will hurt the California reverse mortgages market because there are thousands seniors who own homes whose values exceed the FHA HECM limit. And when a leading reverse mortgage lender such as Bank of America shuts down their program, it means that others are likely to follow suit.
