HECM lending limits increased for the 4th consecutive year
Tuesday, December 3rd FHA released Mortgagee Letter 2019-20 announcing the new maximum claim amount (or lending limit) for Home Equity Conversion Mortgages. The new limit of $765.600 is in effect for the calendar year 2020 and represents a nearly $39,000 increase from last year’s MCA. The move is not an unusual one. Reverse Mortgage Daily reports that the Housing and Economic Recovery Act or HERA mandates that conforming loan limits must reflect changes in the average U.S. home price…
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Will this marginal increase of less than 6% have any real noticeable impact on the HECM endorsement numbers? Very unlikely. On the other hand if that increase in the lending limit increases the UPB on a loan you are originating say $20,000, the related increase in your commission could be a nice little “bonus.”
With the RMSA (Reverse Mortgage Stabilization Act of 2013, PL 113-29), what is the need of Congress eliminating the single national limit and returning to county by county limits? PL 113-29 is codified in 12 USC 1715z-20(h)(3) as follows:
“(h)Administrative authority
The Secretary may—
(3)establish, by notice or mortgagee letter, any additional or alternative requirements that the Secretary, in the Secretary’s discretion, determines are necessary to improve the fiscal safety and soundness of the program authorized by this section, which requirements shall take effect upon issuance.”
Is the purpose in making it the change a legislative proposal rather than invoking 12 USC 1715z-20(h)(3) a political one?