Reverse Mortgage News And Updates
The HECM Standard and Saver options have been eliminated and replaced by a product with reduced proceeds or principal limit (PL) and a revised upfront mortgage insurance premium (MIP) structure. A cap limits the amount of cash a borrower can draw at closing and during the first year to 60% of the initial principal limit. If there are mandatory obligations such as liens or mortgages, the disbursements can match the total of those payoffs and include an additional 10% cash to the borrower up to the PL. The fixed rate option restricts draws to 60% of the principal limit or mandatory obligations plus 10%. Purchase funds are considered manditory obligations and can utilize the full principal limit.
There are two available pricing options: If the disbursements at closing or within the first year do not exceed 60% of the initial PL, there will be an upfront MIP of .5% of the maximum claim amount (MCA). If disbursements exceed 60% there will be an upfront MIP of 2.5%.
Beginning in early 2014, there will be a mandatory financial assessment which includes a credit history and analysis of cash flow and income to determine if the borrower is capable of making property taxes and homeowner's insurance payments. If borrowers fail, they will be required to have a set aside for the payment of those property charges or may be turned down for the reverse mortgage.
This sounds complicated but is understandable when the reverse mortgage calculation sheets are prepared and reviewed. In some cases, where borrower's are close to the 60% threshold, we can strategize to keep the upfront cost at the low MIP and the program very affordable.
Recent HECM regulation is out with a new law in California that stresses counseling in-person. Those who opt for telephone counseling submit a waiver of face to face counseling with the counseling certificate to their lender .
The maximum claim amount high limit has been extended through 2014 and remains at $625,500. Great news for those with high value homes!
Kiplinger.com January 2013
Buy a Home With a Reverse Mortgage
Online Wall Street Journal:June 11, 2012
Counting on an Inheritance? Count Again.
June 4, 2012
Reverse mortgages are one source of income after retirement
NBC Today Show March 21, 2012
Experts Tell Viewers, "Inheritance is Not a Right".
Time Moneyland, Published March 16, 2012
Reverse Mortgages More Popular With Younger Homeowners
Washington Post, Published March 16, 2012
Reverse mortgages can be beneficial, if you know how to use them
New York Times Article - March 8, 2012
Aging Stars in a New Role: TV Pitchman
Senior Housing News Article - Feb. 13, 2012
Will the Nation Go Broke Paying for Senior Housing & Long-Term Care?
US News January 30, 2012
Reverse Mortgages Have Big Potential
Sun-Sentinel January 21, 2012
Bailing on a Reverse Mortgage?
Fox Business January 18, 2012
Who Should Do A Reverse Mortgage?
New York Daily News January 18, 2012
Four Ways For Retirees To Create Income
AARP, The Magazine-November 2011
4 Ways to Get Cash Out of Your House
Financial Planning Magazine-November 2011
Going Into Reverse
The Washington Post-November 4, 2011
Reverse Mortgages Can Be Good Option for Seniors
Reuters-October 27, 2011
Stern Advice: Reverse Mortgages Appeal to Younger Borrowers
New England Cable News Network-October 26, 2011
Reverse Mortgage Expert on How They Can Help
The New York Times-June 24, 2011
Reverse Mortgages Here to Stay
The Macomb Daily (MI)-April 21, 2011
Research Refutes Reverse Mortgage Critics
MSN Money - March 9, 2011
A Deal That Could Save Your Parents
The Chicago Sun- January 31, 2011
Understand Reverse Mortgage Options
Wall Street Journal- January 8, 2011
The Reverse Mortgage Gets a Makeover
Scripps Howard News Service - January 7, 2011
Reverse Mortgages Become Affordable
June 2010 - Generation Mortgage Offers New Jumbo Reverse Mortgage Loan for Homes up to $6 Million! Exclusive Generation Plus fixed-rate loan provides seniors higher payout!
ATLANTA, June 1 /PRNewswire/ -- Generation Mortgage Company™, the largest privately owned reverse mortgage retailer and wholesaler in the United States, today announced the availability of a new jumbo reverse mortgage loan for homes valued up to $6 million. Currently, the only fixed-rate jumbo reverse loan offered industry-wide for higher-valued homes, Generation Mortgage's Generation Plus™ loan product caters to a presently underserved consumer segment, seniors owning homes appraising higher than $1,000,000.
"Many owners of higher-valued homes find themselves in the position of being house rich and cash poor," said Jeff Lewis, Chairman of Generation Mortgage. "With our Plus loan, these owners can receive the liquidity they require without having to sell their home or other assets. And, with an improving real estate market, this offering becomes even more attractive."
For the Generation Plus reverse mortgage loan product, the minimum appraised home value eligible is $500,000 while the maximum value is $6 million. Available in most states throughout Generation Mortgage's national footprint, the jumbo Generation Plus loan is offered at a fixed rate and may be obtained on primary residential homes, including FHA-approved townhomes. Payout is completed at closing and may be used for any purpose, including covering medical expenses or making home repairs or improvements.
"Generation Mortgage is in the business of helping clients to enjoy their homes for as long as possible," commented Lewis. "We will continue to introduce innovative products like Generation Plus to fulfill that goal for the full spectrum of the senior community."
New federal budget proposes increase in reverse mortgage MIP-Changes expected for HECM reverse mortgages would negatively impact seniors.
The Administration’s proposed Fiscal Year 2011 budget for HUD would increase the ongoing mortgage insurance premium on HECM's from 0.5 percent to 1.25 and reduce principal limit factors.If congress approves of the proposal, it will take effect October 1, 2010.
Impact on borrowers will be a higher expected calculating rate resulting in less money in the homeowner's pocket and higher mortgage insurance costs adding to the loan balance.
Seniors and concerned family members may want to ask their representatives in congress not to increase mortgage insurance premiums and lower the amount they can receive. It is important that reverse mortgages continue to be a reasonable option for accessing equity and helping seniors maintain their qualify of life.
January 24, 2010 Maggie O'Connell helps save home from foreclosure.
When a bank takes a loss to make the reverse mortgage work it helps the senior homeowner and itself. You've heard of short sales, here's an example of a short refinance.
A story with a happy ending! (pdf)
November 16, 2009 - HECM Reverse Mortgage high lending limits will continue through the end of 2010 - great news for California Seniors Homeowners!
October 6. 2009 - Interest Rate Reduction for HECM ARMs!
This weeks expected rate fell for adjustable rate reverse mortgages. This is good time to lock in a higher principal limit.
September 10, 2009 - Falling Reserves for FHA Insured Mortgages and Reverse Mortgages Causes Concern - Wall Street Journal. The Federal Housing Administration, hit by increasing mortgage-related losses, is in danger of seeing its reserves fall below the level demanded by Congress, according to government officials, in a development that could raise concerns about whether the agency needs a taxpayer bailout...
August 27, 2009 -'A Full Fall On The Hill' - Current Legislation Update Article
'A Full Fall On The Hill' by Marty Bell - this article provides a good update on current reverse mortgage legislation and addresses NRMLA's position.
August 26, 2009 - Update on current Reverse Mortgage Legislation
The HR 3288 Bill is up in front of the Senate after the August recess. This very important, critical piece of legislation includes proposals concerning how long the current HECM limits of $625,500 will be extended, if at all.
Read more about the HR 3288 bill and review updates and amendments
August 3, 2009 - Attention All Condo Owners considering a reverse mortgage!
Beginning on Oct. 1, 2009, all condo projects will have to go through an extensive approval process in order to qualify for a reverse mortgage. If you are considering a reverse mortgage, it's important you apply and get your counseling certificate prior to the end of August to avoid delays or possibly not qualifying at all! Call Maggie O'Connell at 800-489-0986 or e-mail at firstname.lastname@example.org.
For further information, read this HUD issued mortgagee letter!
February 25, 2009 - New HECM limits $625,000 for balance of 2009!
HUD has now issued the awaited Mortgagee Letter that brings these new loan limits into effect for the balance of 2009. Contact us to find out how this can benefit you!
January 29 2009 - House Passes Economic Stimulus Bill!
The House passed the $819 billion economic stimulus bill by a vote of 244 to 188. This includes a provision to increase the single national loan limit for the balance of 2009. It now awaits a vote in the Senate.
January 22 2009 - Are the HECM limits to go up to $625,500? When the Housing and Economic Recovery Act of 2008, HR 3221 passed, there was confusion over the new HECM lending limit. HUD made a conservative decision to cap the limit at $417,000 which has been in effect since November. There is now a Bill in the House containing a provision to increase the HECM limit to $625,500 to the end of 2009, according to the National Reverse Mortgage Lenders Association.