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Rate Hike to Have Mixed Effect on Reverse Mortgages

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The Federal Reserve raised the federal funds rate for the third time in a little more than a year last week, an expected move that experts say will have a mixed effect on the reverse mortgage market in the coming months.

“The recent rate increases by the Fed are probably not much of a surprise to those in the lending industry, since the economy has been showing signs of improvement in recent months,” said Mike Gruley, executive vice president of reverse mortgage lending at 1st Nations Reverse Mortgage in Ann Arbor, Mich., in an e-mail to RMD.