Posted on 12/02/2022 9:04:51 AM PST by EBH
Reverse Mortgage Funding has filed for bankruptcy. The voluntary petition was registered with the U.S. Bankruptcy Court for the District of Delaware earlier this week. The Starwood Capital-backed company listed assets and liabilities of approximately $10 billion each in the Chapter 11 filing. The bankruptcy classification will allow the firm to continue operating while they work on a plan to repay creditors.
Speaking about the mortgage firm's bankruptcy filing, a representative for Starwood said the decision to file for Chapter 11 protection is necessary and appropriate for RMIT given the adverse trends in the mortgage industry. "We will continue to work closely with management, our advisors, and the company's stakeholders on the best path forward for our investors, consistent with our fiduciary responsibilities," the person said via Yahoo! Finance.
The mortgage company's bankruptcy filing comes almost two weeks after pausing originations. That decision was prompted by the loss of its warehouse funding lines. "On November 21, Reverse Mortgage Funding and its affiliates made the difficult but necessary decision to pause mortgage origination activities," a spokesperson told Reverse Mortgage Daily.
Reverse Mortgage Funding, like many other financial companies, has been challenged by the recent unprecedented interest rate hikes and overall macroeconomic volatility. As a result, almost 500 employees were laid off according to a source with direct knowledge of operations. The mortgage company announced the bankruptcy filing, in a statement that also outlined the efforts being made for its servicing portfolio.
(Excerpt) Read more at msn.com ...
Yay, thank you for the solid info. We have Pennymac. The mortgage was originally through the builder’s financing arm and they sold it to Pennymac after the house closed. I’m hanging on to that mortgage unless/until we sell the house, or should interest rates somehow magically collapse. (Fat chance of that, I think.)
Home financing and real estate agents are going to be hammered.
“Not their first rodeo?”
No, the mortgage is an asset of the entity going bankrupt and may be sold to pay creditors. But the buyer of the mortgage cannot change the terms of the original contract. Our home mortgage changed owners three times and the only thing that happened is that we had to fill out new paperwork for the auto deduct to go to the new mortgage holder.
There will most likely be a few more of these companies going belly up.
They’re a dime a dozen.
So how does one file a reverse bankruptcy?
Seems like that is the thing they should have done.
Our twelve year-old mortgage has been sold twice. The conditions remain unchanged.
Home financing and real estate agents are going to be hammered.
The reverse mortgage racket is a house of cards.
Thank you both for the very helpful information you shared with me. :)
I wouldn't be surprised at all if this were the case. However, when you look at it from the other direction, a homeowner with a mortgage, the asset is owned by the entity holding the loan, not the 'homeowner'. So, in a reverse mortgage, wouldn't the deed be owned by the individual?
I'd be fairly surprised if it were handled like that, in truth, because the banksters always own everything.
Yep. Sorry for the young people.
I think “mortgage companies” and “reverse mortgage companies” have two entirely different business models.
The headline is misleading.
Yep.
Vanguard. BlackRock, REITs, etc.
What’s their exposure?
How’s China’s real estate bubble doing?
Oh, no GDP numbers for 3 quarters and lockdowns...sounds great.
Not to mention all the crypto hijinx going on the last few months. This is gonna be epic. And what may be most epic is what they do to try to stop it. It may make the Russian revolution look like a block party.
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