Reverse Mortgage Program Changes

The reverse mortgage industry has gone through many changes over the last 2 years as directed by The Department of Housing and Urban Development (HUD).  The most recent change has been the implementation of the financial assessment, which has been aimed to strengthen the HECM (Home Equity Conversion Mortgage) program for the future.  HUD will now begin to evaluate the effects of all those changes to see whether those changes are working.  Reverse Mortgage Daily published a recent article which includes comments from HUD on the progress that has been made thus far.  Read the article here.

Urban Makes Changes to HomeSafe Jumbo Reverse Mortgage

Urban Financial of America has announced changes to its HomeSafe program.  The program has expanded to include availability to an additional state (Illinois) and has improved its loan-to-value ratio.  At the moment, the HomeSafe program is also available to the following states:  California, Florida, Hawaii, New Jersey, Texas, Colorado, Arizona.  This program was created for higher valued properties as well as non-FHA approved condos, in which the HECM program does not allow.

Financial Assistance for CA Seniors with Reverse Mortgages

There is a new program in California for low - and moderate-income seniors that will provide them assistance to help avoid foreclosure.  The Reverse Mortgage Assistance Pilot Program, organized by Keep Your Home California, will help eligible seniors with delinquent property taxes and homeowner's insurance expenses.  It is expected to benefit around 1,400 homeowners who have a Home Equity Conversion Mortgage (HECM), also known as a reverse mortgage.  Read more about the new program here.

HUD Says Reverse Mortgages Are a Good Option

The Secretary of the Department of Housing and Urban Development (HUD), Julian Castro, recently stated that the Home Equity Conversion Mortgage (HECM) can provide a boost in retirement for aging Americans in certain situations.  According to Castro, "While the loan doesn't fit for everyone, it can be a good option for those in the right circumstances trying to make it through retirement."  Zillow's Chief Economist, Stan Humphries, also added that a reverse mortgage can help older Americans age in place.  This was all part to an audience question during a fireside chat on January 21, 2015.  Read more here.

Financial Assessment Impact on Reverse Mortgage Lenders

The Department of Housing and Urban Development (HUD) announced last week the implementation of the Financial Assessment for the Home Equity Conversion Mortgage (HECM).  The reverse mortgage industry as a whole welcomes the new guideline to ensure the strength of the program in the long run and added protection for our senior consumers.  The financial assessment is aimed at providing accountability both for borrowers and lenders.  Lenders will be required to closely analyze a borrower's capability to afford and comply with reverse mortgage requirements, such as paying for property taxes and homeowner's insurance.  Some lenders are concerned that loan volume may decrease beginning in March 2, 2015 due to the change keeping some seniors from qualifying.  However, the industry is still working out how the language and criteria of the new rule will affect the lending process, so stay tuned for more information coming soon.

Breaking News: Reverse Mortgage Financial Assessment to Take Effect March 2015

HUD issued Mortgagee Letter 2014-22 on November 10, 2014, signaling the confirmation of the long anticipated Home Equity Conversion Mortgage (HECM) Financial Assessment and Property Charge Requirements.  The financial assessment requirements will be effective for all case numbers issued on or after March 2, 2015.  The purpose of the new requirements is to evaluate the mortgagor's (borrower) willingness and capacity to timely meet his or her financial obligations and to comply with the mortgage requirements.  The mortgagee (lender) must also consider to what extent the proceeds of the HECM could provide a solution to any financial difficulties the borrower may be currently having.  The borrower's income and credit history will be reviewed with the possibility of establishing an escrow account from the reverse mortgage proceeds to pay for future property tax and homeowner's insurance premiums.  Stay tuned for additional information as it becomes available.  

Love ‘em, hate ‘em, reverse mortgages are staying

A recent article in the El Paso Inc gives an insight to how the perception of reverse mortgages has changed.  More and more homeowners and professionals are learning that a reverse mortgage has been a good product all along, but they just hadn't realized that until recently.  Click on the link to read the entire article:

Love ‘em, hate ‘em, reverse mortgages are staying - Personal Finance - El Paso Inc.



And click here to learn more about reverse mortgages.

Financial Planners Should Recommend Reverse Mortgages

A recent article in Financial Planning suggests that financial planners should consider recommending reverse mortgages for elderly clients and for the parents of middle-aged clients.  Jim Kinney from Financial Pathway Advisors tells Financial Planning that "Reverse mortgages can be a very useful tool for seniors who plan to stay in the home for a long time."  He goes on to say that "For seniors who are short on liquid funds for an emergency, the HECM (home equity conversion mortgage) line of credit can be a lifesaver."  Click here to gain access to the article.

Reverse Mortgage Principal Limit Changes

Beginning August 4, 2014, FHA will make changes to the principal limit factors (PLF) for FHA Reverse Mortgages, also known as HECM's.  The principal limit is the loan amount available based on a property's value minus closing costs and any existing liens.  The PLF will increase the qualifying percentages for the majority of reverse mortgage borrowers.  This is great news for the reverse mortgage industry and homeowners over the age of 62.

Senior Home Equity On the Rise

According to the latest Reverse Mortgage Market Index (RMMI), Senior homeowner equity reported a $83.5 billion surge in the fourth quarter of 2013 and the seventh consecutive quarter where the RMMI has risen.  That is good news for the senior homeowner looking to tap into their equity by way of a reverse mortgage.

Reverse Mortgages and Retirement Planning

Reverse mortgages are being considered more and more as a financial retirement tool for senior homeowners.  The financial planning community has realized the potential of using the equity in one's home by way of a reverse mortgage to help fund retirement.  There are certain reverse mortgage payment plans that work better to meet the needs of those who are not necessarily in immediate need of money but rather are looking for ways to extend their assets to last their lifetime.

InvestmentNews recently published an article discussing the new uses of a reverse mortgage for financial planning, and various other individuals have published similar articles.

For more information on reverse mortgages and to be put in touch with a reputable reverse mortgage lender, visit our website at:  www.reversemortgagebenefit.com.

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