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First American Introduces Reverse Mortgage Score

""The First American Corporation"":http://www.firstam.com has developed a new reverse mortgage score to help servicers identify senior homeowner candidates for a government-insured ""Home Equity Conversion Mortgage"":http://www.hud.gov/offices/hsg/sfh/hecm/hecm--df.cfm (HECM), who might otherwise face foreclosure. The company launched the new score today at the ""National Reverse Mortgage Lenders Association’s"":http://www.nrmlaonline.org/ annual meeting in Los Angeles.
According to the ""American Association of Retired People"":http://www.aarp.org (AARP), more senior home owners are falling behind on their first mortgages. Randy Gilster of First American’s Outsourcing and Technology Solutions business line pointed out that last year, AARP reported 648,000 Americans age 50 and older became delinquent on their mortgage payments, and nearly 50,000 went into foreclosure. First American says its new scoring model will help servicers determine whether a reverse mortgage is a viable loan modification option for this group of borrowers.
The new loan-level score examines a broad range of homeowner and property data obtained from First American’s data repository. For example, it takes into account the number of borrowers on the loan and their ages. Specific property information analyzed to determine the score includes: eligible residences (reverse mortgages are not permitted on second homes and investment properties), property types, appraised values, outstanding mortgages and liens, and the new HECM national loan limit of $417,000. The weighted value score generated predicts the likelihood of the loan being eligible for an HECM reverse mortgage, First American explained.
First American’s evaluation also considers factors that tend to complicate reverse mortgages, such as living trusts, bankruptcy filings, and powers of attorney. The servicer receives a report that includes an estimated principal limit after paying off current liens, servicing fees, originations fees, mortgage insurance, and estimated closing costs. Using the score, the servicer can then determine whether to offer a HECM loan as one of its loss mitigation workout options. The score considers all HECM loan options and provides alternative choices to traditional loan modification.
""Homeowners who are 62 years or older and who have equity in their homes can often qualify for a federally insured reverse mortgage, without regard to their credit score,"" Gilster said. ""Our new score helps lenders identify the best candidates for these loans and gives default managers new options to help senior homeowners.""

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
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