The Hindu : Business : LIC Housing to launch reverse mortgage loan

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Wednesday, Jun 20, 2007
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LIC Housing to launch reverse mortgage loan

Special Correspondent

HYDERABAD: LIC Housing Finance will roll out the reverse mortgage loan next month as it sees a huge potential for this new business opportunity.

Disclosing this at a press conference here on Tuesday, Director and chief executive, S. K. Mitter, said there were quite a few legal and social issues involved in it. However, the company was working out the modalities of safeguards to be incorporated in the product design itself. “We will document all these issues to insulate the company from possible wrangles,” he said.

In the reverse mortgage process, the company would offer 40 per cent of the valuation of property to be mortgaged to those who were aged between 60 and 65, while those who crossed 75 years would get 60 per cent. The maximum term of reverse mortgage was 15 years and repayment mode could be chosen by the beneficiary.

To a query if there was any insurance linkage to the product as senior citizens would be the beneficiaries of the product, he said it could be worked out as it would prove to be an attractive proposition.

The company, which had invested Rs. 50 crore in Kotak Realty Fund and Rs. 10 crore in CAG Realty Fund this year, might consider setting up its own venture capital fund, if the market performance was encouraging. The company would raise Rs. 1,000 crore fixed deposits offering 9 per cent interest for three-year deposits and 9.25 per cent for five-year deposits.

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