COLORADO SPRINGS, Colo.-Ent FCU has opted to work with Members Trust to provide FHA's HECM to members, and performs "enough of the processing, which is the bulk of the work except for the underwriting" to earn the full origination fee.
According to Jon Paukovich, VP of mortgage lending for Ent, Members Trust also handles Ent's servicing. Ent currently holds its reverse mortgages since the secondary market for the FHA product has dried up, Paukovich said. "It's very hard to sell them now. We hope within the next few weeks we can sell them to Fannie Mae."
For Ent, the unique mortgage provides a "nice fee income." But the reason it offers reverse mortgages-closing about four per month - is for the "valuable service" to senior members and to further separate itself from banks, Paukovich said. "While reverse mortgages are heavily regulated, individuals can be preyed upon by unscrupulous brokers. The credit union provides members with a safe environment to conduct a transaction in which there isn't a lot of skepticism and misunderstanding."
According to Paukovich, predatory reverse mortgage programs in the '70s and '80s have led to misunderstanding about today's products. Borrowers are often mistakenly concerned that they could lose their home before they are ready to leave, which often leads to members taking "three times as long" to decide on a reverse mortgage compared with a traditional mortgage, Paukovich said. "It can be a lengthy process. The family is often involved, which we encourage."
