Reverse mortgages provide these consumers with a line of credit, a monthly payment or a combination of the two. Funds are sent directly from the lender to homeowners by check or by direct deposit, and homeowners may switch between line of credit and monthly payment options as often as desired. No repayment is required as long as the consumer maintains the home as his or her primary residence. Homeowners retain title to their homes and can leave a home to their heirs, who can either pay off the loan or sell the home to retire the debt. Regardless of whether the loan comes due because of death or relocation, the lender can only look to the proceeds of the home's sale for loan repayment.
Any negative difference is forgiven.
In addition to potential goodwill, reverse mortgage lenders benefit from CRA consideration and increased core deposits from monthly payments sent by the servicer to borrowers' bank accounts. Larry Walker, who heads Wendover Financial Services, is optimistic about the future of the servicer's reverse mortgage program. As more senior consumers learn about reverse mortgages, they are encouraging their lenders to offer them, and those lenders are realizing that this program meets the needs of consumers who have traditionally been underserved. Wendover offers a single source for the full spectrum of consumer and residential lending products and services including origination, processing, servicing, collections and asset recovery on a flexible, modular basis. EDS, a leader in the global information technology services industry for more than 35 years, delivers management consulting, electronic business solutions, and systems and technology expertise to improve the performance of more than 9,000 business and government clients in about 50 countries.