Reverse Mortgage Investment Trust Inc., one of the nation’s largest mortgage lenders that enables people to tap the equity built up in their homes, has filed for chapter 11 bankruptcy protection, WSJ Pro Bankruptcy reported. The Bloomfield, N.J.-based company partly attributed rising interest rates to the disruption of its business. Reverse Mortgage said it faced a liquidity crunch and stopped mortgage origination in early November as it had to increase the capital to support the origination of new loans and to service portfolios. Reverse mortgages are typically made to seniors looking to tap the value built up in their homes. Backed by investment firm Starwood Capital Group, the company lists both assets and liabilities of $10 billion to $50 billion, according to a court filing. Reverse Mortgage is in talks to ensure that its servicing portfolio is managed and that work has begun to transfer loans in its pipeline to other lenders. Reverse Mortgage, established in 2012, is at least the second real-estate lender to file for bankruptcy this year. In June, residential lender First Guaranty Mortgage Corp. filed for bankruptcy as fewer home borrowers were refinancing due to rising interest rates and tight housing supply.
