The 10-Year CMT Index forecast for 2023

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Economists’ 2023 forecast for the HECM CMT index

After a series of consistent increases in the 10-year CMT, the index is now whipsawing back and forth. Here’s one economic group’s projection of where the HECM’s key rate will go in 2023.

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Mike Johnson February 1, 2023 at 7:55 am

REVERSE is failing seniors today! 90% complain that closing costs are way too high, especially MIP costs of up to $21,780 for a $1,089,000 home, and Intangible TAX and State tax stamps in FL running as high as $10,000. Add these fees to the origination cost of $6,000 and other closing fees, and you already have $38,000 in closing costs before adding other fees. I had one turn it down the other day at $45,000 in total closing costs. They specifically asked me to pass along to both the FHA/HUD folks and the State of Florida, to please revisit these super high costs preventing MOST from proceeding.

Add to these high closing costs, the number that cannot use the Reverse as they only get 60% up front and must wait for the remaining 40% for a FULL year, preventing many from paying off all their credit card bills and having to wait a full year to get the remaining funds to pay off high costs of credit card bills. Those same credit card bills are often the very thing that disqualifies them from even getting the REVERSE if they wanted to. Giving a 62-year-old 60% or 36% is just a 21.6% of home value loan. Then take $45K in closing costs away and they have insufficient funds or short to close. The program needs changes to make it a worthwhile program for a large percentage that either doesn’t qualify or qualifies but has little left to accomplish their financial goals.

James E. Veale, MBT February 1, 2023 at 1:38 pm


While your numbers are right, seniors do not always have to wait one year to get the other 40% in proceeds on an adjustable rate HECM. For example let us say they have that $1,089,300 home you are providing in your example. Let us say that the principal limit factor is 36%. First the gross proceeds would be $392,148. Now 60% of that amount is 235,288.80. The net principal limit with $45,000 in upfront costs is $190,288.80. Let us say that the existing mortgage is $260,000. The borrower would not be required to bring funds to closing.

The borrower would get his existing mortgage paid off. Let us say the borrower takes the maximum available to him which is $39,214.80. The UPB at closing would be $344,214.80. The HECM Line of Credit would be $47,933.20 but the borrower would have to wait one year to get any of that money.

So I do not understand your point about the 60% rule. While it is restrictive, it is not as you portray it.


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