Breaking News: New Private Insured Reverse Mortgage

Just announced on August 19th, 2014....the Reverse Mortgage industry will soon have more options to help more homeowners.  Up to this point, 95% of reverse mortgages originated today are under FHA's HECM program.  HECM's (Home Equity Conversion Mortgage) are insured by HUD and most follow HUD guidelines.  As a result, there are certain property types and scenarios that are unable to qualify for a FHA reverse mortgage.  A proprietary reverse mortgage can now allow for financing on non-FHA approved condos, will allow seller concessions on reverse mortgage purchases, and provide greater flexibility for high values homes.  Urban Financial of America is the first investor who will be offering a private reverse mortgage which will be called the HomeSafe Reverse Mortgage.

Send your questions and scenarios to ReverseMortgageBenefit.com and we will be sure to put you in touch with a lender who can meet your needs including the HomeSafe product.

Texas and Non-Borrowing Spouses

As of August 8th 2014, the state of Texas is not allowing the new HUD rules on Non-Borrowing Spouses (NBS) regarding reverse mortgages.  The good news is that the spouse issue is not a constitutional issue and is expected to be resolved in the next month or two.  The National Reverse Mortgage Lenders Association (NRMLA) is currently working with HUD to amend Texas loan documents to allow for the implementation of the new NBS rules.  We will keep you posted as developments unfold.

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.

Reverse Mortgages Are Aimed To Boom

The FHA reverse mortgage program has been recently strengthened more than ever to attract Baby Boomers looking for additional sources of income to fund their retirements.  Recent government regulations have been modified to further protect senior borrowers from issues such as leaving a spouse unprotected and ensuring borrowers have sufficient assets to pay for property taxes and homeowner's insurance.  According to CBSNEWS, "The reverse mortgage is going to be a lifeline for millions of retirees in the years to come."  Read the entire article here.

Technology Helping Seniors Age in Place

Researchers are testing new ways to prevent elderly people from injuring themselves at home. The Wall Street Journal published an article discussing the importance for engineers and health experts to use technology to help seniors avoid falls and reach help quicker.  Though the costs of using technology obviously needs to be made affordable, the offset is to keep seniors living in their homes for a longer period of time and avoid higher assisted-care living expenses.  Read the entire article here.

Health Care Costs For Retired Couple

Fidelity Benefits Consulting published a recent article stating that, based on their estimate, a 65 year-old couple retiring this year will need an average of $220,000 to cover medical expenses throughout retirement. That figure is down from their 2010 figure which was $250,000.  As stated, health care continues to be one of America's largest expenses in retirement.  Fidelity suggests to consider opening a health savings account (HSAs) which allow individuals to pay for qualified medical expenses on a federal tax-free basis.  Read the entire article here.

Are Baby Boomers Downsizing?

Fannie Mae issued a recent article detailing that so far Baby Boomers have shown little sign in selling their homes to downsize or relocate.  Is it just a matter of time before they move or is it that they are still waiting for the housing market to peak?  Or could it be, as AARP found out in a survey in 2010, that nearly nine in ten Baby Boomers prefer to remain in the current residences for as long as possible?  The Fannie Mae article suggests that the inevitable will be that a large enough amount of Baby Boomers will end up relocating and causing quite a stir in the housing market.  Read the entire article here.