Math Corporation today made its next product, ZMathElements, available for license.  ZMathElements, as the name infers, are some of the base elements (i.e. functions and tasks) that make up the ZMathEngine.  It is targeted to those that only need a part or parts of the ZMathEngine, instead of the entire solution.  Go check out the product page and let us know what you think.  If you have Elements that you'd like to see, let us know.

The eZMathReverse application has been updated.  This update represents a complete rewrite of the previous version.  Not only does the new version incorporate both the original and new HECM principal rate factors, it also outputs the Truth-in-Lending statement, if applicable.  You can now use eZMathReverse as your one source of calculated figures for your reverse mortgage operation.  Give it a run and let us know how we did!

There has been an interesting development in lending that is borne of this economic crisis we're in.  What is it?  It it borrowers that take an FHA loan even if they have a sufficient loan-to-value ratio.  What does this do?  It requires that they pay the funding fee and mortgage insurance premiums for a minimum of five years.  This is certainly an expense that most borrowers avoiided if they had at least an 80% loan-to-value ratio.  However, since some lenders are only allowing FHA originations, borrowers are being forced into this added expense if they want a loan.  In a future post, we will be showing you how to use eZMath and ZMath to originate loans with mortgage insurance, including FHA.

It seems to us that the time is ripe for reverse mortgages.  Why?  Because it allows your customers to benefit from their most valuable asset.  It also helps them avoid liquidating other under-valued assets to supplement dwindling income due to the current financial crisis.  When you look at most of your retirement-aged customers, what one asset do they have that their heirs probably don't want to have to deal with in the future?  Most likely their home.  At the same time, assuming that stocks and other financial assets will recover lost value over time, it makes sense to hold those assets rather than liquidate them at these depressed prices in order to supplement income.  Additionally, stocks, securities and other financial assets are easier for heirs to deal with when the time comes.

There is general confusion and hesitation when it comes to reverse mortgages.  Many of the people that would benefit from this instrument do not understand the benefits nor the mechanics.  Many believe that it is possible for them to lose their home before they want to leave it.  Or they believe that they are not getting fair value from it.  Also, given the bad press that the mortgage industry has suffered through the past number of months, they are suspicious of anything that is unfamiliar to them.  Well, it is time for you to sit down with those potential clients and explain the benefits of this truly creative and valuable financial instrument.  You may just find that you have a number of originations just waiting to happen.

With interest rates at near-historic lows is a refinance boom on the way and will that wave be enough to mend an ailing industry?  That is the $64,000 question (seems a little under-priced doesn't it?) these days.  I have always believed that the mortgage industry is a self-healing industry and that refinance waves are often the beginning of the healing process.  The wounds suffered during this past (and current) crisis are certainly more mortal than those that we've seen in the past.  However, the industry can still recover from them.  How?  By sound lending to what have been reliable customers.  There is a real opportunity out there for existing mortgagors to lower payments and pay off loans with shorter terms.  These refi's can be the foundation of the rebuilding of the secondary market.

How do we go about that?  I have always believed that mortgage lenders have under-marketed themselves to their established borrowers.  Well, now is the time to approach those people with this opportunity and, in turn, boost your volume and generate business.  Out of this new opportunies will spawn.  It may not be the cure-all but it is certainly one way to begin the healing.