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.

New Date Set for Financial Assessment

HUD announced on February 26, 2015 that the Financial Assessment guideline will now take effect on April 27, 2015.  HUD issued Mortgagee Letter 2015-06 confirming that Financial Assessment will be effective for all case numbers issued on or after April 27, 2015.  Click here  to read the entire mortgagee letter.

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.  

Reverse Mortgage Guideline Changes

The Department of Housing and Urban Development plans on publishing a Mortgagee Letter to provide guidelines on two separate policies.  The first addresses the non-borrowing spouse issue which will allow a spouse under the age of 62 to be placed on the reverse mortgage loan.  The second policy change will deal with financial assessment to help strengthen the program and protect borrowers.  The Mortgagee Letter is expected to be published in mid-February with an implementation 90 days after it is issued.

For up to date information on reverse mortgages, send a request to be contacted by a top reverse mortgage lender.  Visit:  www.reversemortgagebenefit.com.

ReverseMortgageBenefit.com
info@reversemortgagebenefit.com
www.reversemortgagebenefit.com