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.

Reverse Mortgage Counseling Agencies Receive Funding

The Senate just recently passed a $1.1 trillion spending bill that will make way for housing counseling funding, including reverse mortgage counseling.  The bill did not specify the exact amount that will be allocated to reverse mortgage counseling, however the overall total amount of $47 million allocated to housing counseling is $2 million more than what was allocated for 2014.  This should allow some agencies to offer "free" reverse mortgage counseling services, so homeowners should check with different agencies.  

Reverse Mortgages 2014 In Review

The year 2014 saw many changes for the reverse mortgage industry, which for some is nothing new.  Over the past several years, the industry has gone through its fair share of changes.  Reverse Mortgage Daily compiled its 10 most read articles of 2014 ranging from the exit of Generation Mortgage to the new Non-Borrowing Spouse regulation.  Bring yourself up to speed and click here to read all the stories that impacted reverse mortgages during the year.

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.

MarketWatch Says Reverse Mortgages Better Than HELOCs for Some

According to MarketWatch, a reverse mortgage may be a better alternative for some when compared to a home equity line of credit (HELOC).  The article provides three options on how to access one's home equity:  reverse mortgages, HELOCs and home equity loans.  The only option that does not require a monthly payment is a reverse mortgage, and the article cautions readers to consider the risk of losing your home if you can't make the payment.  Read the entire article here.  And find out more about reverse mortgages here.