HUD’s Reinvention of the HECM Program
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If you happen to be a person who dislikes change then this week was especially difficult for you. If you endure sudden changes well, this week still presents it’s challenges. HUD has effectively launched HECM 3.0. Version 1 was the HECM program veterans knew and loved. One product, typically one margin, tenure payments and some lines of credit. Version 2.0 arrived with the advent of the Purchase & Saver programs. The programs third reinvention eliminates all present loan programs and effectively gives us a Saver reverse mortgage with a higher and graduated upfront mortgage insurance premium. This is a difficult pill to swallow as new lending ratios will nearly mirror the soon to be eliminated Saver, upfront FHA insurance will spike from .01 percent to one half or as high as 2.5 percent depending on draws and borrowers will be restricted one how much money they can take in the first year. Wow. That is a big pill to swallow. So what can we do? Here are a few steps…