We use very strict underwriting criteria before entering into any shared equity release transaction. Part of this underwriting includes making sure there isn’t too much debt on the home already. We limit the amount of equity we’re exposed to, and we ensure there will be enough of an equity “cushion” in the property after our shared equity release transaction to reduce as far as possible any opportunity for loss on our part. We also have terms and conditions in our agreement to ensure that the homeowner does not accrue additional debt in a manner that could jeopardize the value of our ownership interest.
How do you protect against one of your homeowner customers taking on too much debt and compromising the security of your share of their home equity?
by QuantmRE | Aug 21, 2018