First American Introduces Reverse Mortgage Score
—New Score Helps Servicers Prevent Foreclosures For Senior Homeowners—
November 17, 2008, SANTA ANA, Calif.
The First American Corporation (NYSE; FAF), America’s largest provider of business information, announced today that it has developed a new reverse mortgage score to help servicers identify candidates for a government-insured Home Equity Conversion Mortgage (HECM), who might otherwise face foreclosure. The new score was launched today at the National Reverse Mortgage Lenders Association’s annual meeting in Los Angeles.
The new loan-level score examines a broad range of homeowner and property data obtained from First American’s extensive 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.
The 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 alterative choices to traditional loan modification.
“Last year, 648,000 Americans age 50 and older fell behind on their mortgage payments, and nearly 50,000 went into foreclosure, according to the American Association of Retired People (AARP),” said Randy Gilster, of First American’s Outsourcing and Technology Solutions business line. “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. Our new score helps lenders identify the best candidates for these loans and gives default managers new options to help senior homeowners.”
About First American
The First American Corporation (NYSE: FAF) is a FORTUNE 500® company that traces its history to 1889. With revenues of approximately $8.2 billion in 2007, it is America’s largest provider of business information. First American combines advanced analytics with its vast data resources to supply businesses and consumers with valuable information products to support the major economic events of people’s lives, such as getting a job, renting an apartment, buying a car or house, securing a mortgage and opening or buying a business. The First American Family of Companies, many of which command leading market share positions in their respective industries, operate within five primary business segments, including: Title Insurance and Services, Specialty Insurance, Information and Outsourcing Solutions, Data and Analytic Solutions, and Risk Mitigation and Business Solutions. More information about the company and an archive of its press releases can be found at www.firstam.com.