As of March 31, 2010, the Federal Reserve has stopped the policy of buying mortgage-backed securities. The reason the Fed has implemented this policy in the first place was to help keep mortgage rates low while, in effect, subsidizing the real estate market and providing capital for distressed lenders as well as investors.

As the difficulties increased with the traditional lending industry, a new group of companies entered the Reverse market. Obviously they felt that they could pick up new business by offering the Reverse mortgage and that would offset the loss of the traditional loan market. What they failed to understand, is the complexity of doing these loans and the patience that is required to work with the Senior community.

In the last 18 months there was a surge in the amount of brokers and companies offering the program but with very little experience (Or in most cases, no experience at all ) in processing, marketing, service or training for their Loan Officers. The expectation is that within the next six about half these these “newbies” will disappear from the Reverse industry.

Out of 2700 companies offering the loan, only 135 of them averaged 10 loans a month, not enough for a Mortgage Broker to survive and be profitable. Since I began specializing in the program seven years ago, I saw the “wave” of competition entering the market with an attitude, that it was all about them and just “getting the app”.

Working with Seniors requires a Loan Officer to be willing to do whatever it takes to make it as easy as possible for the borrower. That could mean several trips to their home, meeting with family members, attorneys and financial advisors. It’s important to develop a relationship, don’t rush it and be compassionate.

Learn more about Obama Mortgage Relief Plan Qualifications.