Jumbo Reverse Mortgage

Recent events constraining liquidity, securitization, and demand in the capital markets for structured debt securities have severely impacted the ability of lenders to offer jumbo reverse mortgage loans outside the limits offered by the FHA's guidelines.

Some lenders are making jumbo reverse mortgage loans that require a significant amount of equity to exist in the property as well as required 2 appraisal to justify the value of the property. 

The leverage (LTVs) are significantly lower than in prior years as lenders are taking a very conservative approach to jumbo reverse mortgages.

The current constraints are leading mortgagors (homeowners seeking super jumbo mortgages) to make larger cash down payments to make up for the reduction in leverage currently being afforded, and a resurgence in the utilization of mortgages from private banks and other non-traditional and non-MBS lenders.