Reverse mortgage originations up 77%
TORONTO, Jan. 6 /CNW/ - HOMEQ Corporation ("HOMEQ") today announced that its subsidiary, HomEquity Bank, reported record originations of reverse mortgages of $43 million in the fourth quarter of 2009. This represents an increase of 77% over the same period last year and an increase of 11% over the previous record set in the second quarter of 2008. As at December 31, 2009 the reverse mortgage portfolio of $865 million was $52 million or 6% higher than as at December 31, 2008.
This record breaking performance follows the October 2009 announcement that HomEquity Bank had received its federal bank charter, and its November 2009 announcement of major reductions in reverse mortgage interest rates. "Our ability to access cost-effective and reliable sources of funding as a bank has allowed us to lower our cost of borrowing and pass the savings to our customers. The increase in originations during the last quarter is an early indication that our pricing strategy is working and that our reverse mortgage offering is being transformed from a niche product into a mainstream financial solution," said Steven Ranson, President and CEO.
HomEquity Bank has been the main underwriter of reverse mortgages in Canada for more than 20 years. Reverse mortgages are offered to Canadian homeowners 60 and older and have no income, credit or health qualifications. Unlike traditional loans, borrowers don't have to service the interest or repay the principal for as long as they own their home and are living in it.
In addition to helping Canadian seniors access home equity through its direct-to-consumer distribution model, HomEquity Bank partners with major Canadian banks, credit unions, mortgage brokers, investment and financial planning firms to offer its reverse mortgage solution.
HOMEQ Corporation expects to release its 2009 fourth quarter financial results after the close of business on March 4th, 2010 followed by a conference call to discuss its performance the following morning.
All figures reported in this press release are on an unaudited basis.
Forward Looking Statements
From time to time, HOMEQ Corporation makes written and verbal forward-looking statements about business objectives, operations, performance, and financial condition, including the likelihood of HOMEQ's success in developing and expanding its business. These may be included in HOMEQ's or its predecessor's Annual Reports, regulatory filings, reports to shareholders, press releases, presentations and other communications. These forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of HOMEQ. Actual results may differ materially from those expressed or implied by such forward-looking statements. HOMEQ does not undertake to update any forward-looking statement, whether written or verbal, that may be made from time to time.
About HomEquity Bank and HOMEQ Corporation
HomEquity Bank is a Schedule I Canadian Bank and a wholly-owned subsidiary of HOMEQ Corporation. HOMEQ's shares trade on the Toronto Stock Exchange under the symbol HEQ.
HomEquity Bank is the only national provider of reverse mortgages to homeowners aged 60 and over, Canada's fastest growing demographic segment. HomEquity Bank originates and administers Canada's largest portfolio of reverse mortgages under the CHIP Home Income Plan brand. As of December 31, 2009, the mortgage portfolio comprised approximately 7,000 reverse mortgages with an accrued value of $865 million, secured by residential properties across Canada worth approximately $2.3 billion. HomEquity Bank has been the main underwriter of reverse mortgages in Canada since its predecessor, Canadian Home Income Plan, pioneered the concept in 1986.
HomEquity Bank has an effective direct-to-consumer distribution model as well as a well-established referral network. This extensive referral network includes all major Canadian banks, credit unions, mortgage brokers, investment and financial planning firms.
HomEquity Bank also offers competitive Guaranteed Investment Certificates (GICs) to investors across Canada through independent deposit brokers and major Canadian banks. For more information about HomEquity Bank, please visit www.homequitybank.ca. Additional information on HOMEQ, including annual and quarterly reports can be viewed at www.homeq.ca.
SOURCE HOMEQ Corporation
For further information: For further information: Steven K. Ranson, President and Chief Executive Officer, (416) 413-4663; or Gary Krikler, Senior Vice President and Chief Financial Officer, (416) 413-4679