Q:

What is a reverse mortgage wholesale lender?

A:

Quick Answer

A reverse mortgage wholesale lender works with third-party mortgage brokers, loan officers and other banks and does not deal directly with consumers, explains The Truth About Mortgage. The wholesale lender that provides the financing for the reverse mortgage does so without any direct contact with the borrower.

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Full Answer

A reverse mortgage is a special type of financing for borrowers over the age of 62, according to the National Reverse Mortgage Lenders Association. The financing allows borrowers to convert any equity in their home into cash. Some reverse mortgage wholesale lenders allow borrowers to receive the cash in the form of monthly payments, which is why the term "reverse mortgage" is well-known throughout the mortgage industry.

The U.S. Department of Housing and Urban Development offers a reverse mortgage program called the Home Equity Conversion Mortgage, explains the NRMLA. The program is not a government loan, but it is offered by reverse mortgage wholesale and retail lenders monitored by the U.S. Government. The HECM program is the most popular reverse mortgage program in the United States. Under the program, HUD charges borrowers a fee of 1.25 percent of the current loan balance. The money collected from the annual fee provides insurance to borrowers in the event lenders are unable to make monthly reverse mortgage payments.

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