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 New Reverse Mortgage Will Cost “Simply Zero” -- Financial Freedom Eliminates All Up-Front Costs With New Jumbo Reverse Mortgage -- NEWS RELEASE July 13, 2004 FOR IMMEDIATE RELEASE
New Reverse Mortgage Will Cost “Simply Zero”
Financial Freedom Eliminates All Up-Front Costs With New Jumbo Reverse Mortgage Irvine, CA, (July 13, 2004) – Financial Freedom Senior Funding Corporation, the nation’s largest lender and servicer of reverse mortgages and a subsidiary of Lehman Brothers Bank, FSB, announced today the introduction of the Financial Freedom™ Simply Zero Cash Account™, the first loan to eliminate all up-front costs for the reverse mortgage industry. The structure of this new reverse mortgage, geared to home values greater than $450,000, gives jumbo borrowers more money than has been previously possible. “Cost has been the only real point of criticism we’ve heard from consumers. Now we are answering the call by removing the only barrier to entry, ” said James Mahoney, CEO of Financial Freedom™ “Moreover, because of the pricing structure, we expect Simply Zero to compete with HELOCs and home equity loans for the senior market.”” For the Simply Zero Cash Account™, Financial Freedom™ has eliminated up-front origination fees and all closing costs of a reverse mortgage. Borrowers are required to draw 100% of their maximum available benefit at loan closing, however Financial Freedom™ has kept the interest rate structure the same as its standard Cash Account™, which is the only jumbo reverse mortgage available. Simply Zero was developed following a very successful roll out of the Zero Point Cash Account last year. Financial Freedom’s innovative approach to eliminate up-front origination fees and cap third party closing costs at $3500 was an industry first. Since September, the Zero Point contributed to a nearly 200% increase in monthly volume. The Zero Point Cash Account™ requires borrowers to draw 75% of their maximum available benefit at loan closing. Both products provide homeowners age 62 or older with the ability to convert their home equity into cash without having to sell their home or assume monthly payments. In addition, both boast numerous consumer safeguards that have become standard in the industry, including third party counseling to ensure the borrower understands the terms of the loan and that the loan is appropriately matched to the borrower’s needs. Financial Freedom™ has also instituted interest rate caps (6%) that are the lowest in the industry. Reverse mortgages also are structured so that borrowers always retain title to their homes and cannot owe more than their homes are worth. About Reverse Mortgages A reverse mortgage is a loan that enables homeowners 62 or older to borrow against the equity in their home, without having to sell their home, give up title, or take on a new monthly mortgage payment. The loan proceeds can be used for any purpose, and the loan isn't repaid until the borrower moves out of the home permanently. When the loan is repaid (the repayment amount can't exceed the value of the home), any remaining equity goes to the borrower's heirs/estate. Loan proceeds can be taken out as a line of credit, lump sum payment, fixed monthly payment, or combination. Reverse mortgages have emerged as a significant financial security tool for senior homeowners because of the broad range of needs these loans can satisfy, such as:
About Financial Freedom™ Financial Freedom™ is a founding member of the National Reverse Mortgage Lenders Association. NRMLA is a nonprofit trade association, based in Washington, DC, whose mission is to support the continued evolution of reverse mortgages as an important financial option for senior homeowners while educating both its members and consumers about the varied applications of this unique loan. For more information, visit the Financial Freedom Web site at www.financialfreedom.com. Members sign a Code of Conduct pledging to abide by guidelines that assure fair, ethical, and respectful practices in offering and making reverse mortgages to seniors. For more information, visit the NRMLA Web site at www.reversemortgage.org. Financial Freedom™, based in Irvine, California, is the largest originator of reverse mortgages in the United States. Financial Freedom™ originated $1 billion of home value in reverse mortgages in 2002 and has made more than 30,000 reverse mortgage loans totaling more than $5 billion in home value. Financial Freedom™ is now the largest servicer of reverse mortgages with a servicing portfolio of approximately 32,000 loans. Lehman Brothers Bank, FSB is a subsidiary of Lehman Brothers, the global investment bank. The Bank provides a full range of community banking services to individuals in Delaware, as well as consumer financial services and products, such as mortgage and deposit products, to high-net-worth clients. Headquartered in Delaware, the Bank is expanding its capabilities through the Internet to provide banking services nationally, and plans to offer its products through strategic partnerships with retail and financial organizations throughout the country. Additional information on Lehman Brothers Bank and its services can be found by visiting its website at www.lehmanbank.com. The flag logo, “Financial Freedom,” “The Reverse Mortgage Specialist,” “Cash Account” and “Zero Point Cash Account” are Trademarks of Financial Freedom Senior Funding Corporation, Irvine, California. # # #
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