HECM Changes & the Ensuing Crash in Volume
Today marks one week after HUD enacted yet another reform of the Home Equity Conversion Mortgage. While it’s still too early to tell, what lasting impacts can we expect as a results of these changes?
While the mortgagee letter was rather pithy, the potential impacts are considerable. Here are some impacts to anticipate and plan for in the wake of the most recent overhaul of the federally-insured reverse mortgage.
Fewer qualified borrowers with high mortgage balances. Just as rising interest rates squeeze out homebuyers requiring higher down payments and monthly installments, HUD’s lending ratio and floor reductions will preclude a significant percentage of those seeking to eliminate their monthly mortgage burden.
Opportunities for smaller lenders and brokers. The resulting push to compete on loan margins will reduce the money available for marketing…Â Â Download the video transcript here.
4 Comments
Is any organization working to try to get these changes reversed?
Larry,
Why? What do you believe should replace them?
Too late for that. We had our say after 8/14.
The secondary market might try to do something. I see a non-fha reverse mortgage. Just getting rid of HUD and FHA might help.
Robin,
Your suggestions are ridiculous.
As to non-FHA reverse mortgages, I cannot tell you how many seniors I had to call to tell them that their application was being denied due to the proprietary product lender stopping their reverse mortgage lending.