HUD: The HECM holds a unique role

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HUD: The HECM fills a ‘unique role’

“The Home Equity Conversion Mortgages (HECM) program fills a unique role in the national mortgage market and offers critical opportunities for the nation’s seniors to utilize their own assets and resources to preserve their quality of life by aging in place,” a HUD spokesperson told…

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1 comment

James E Veale, CPA, MBT June 14, 2021 at 11:07 am

Proceeds from any debt used to replace income in a cash flow/tax savings strategy is personal indebtedness: thus any interest and MIP accruing on such proceeds are NOT deductible. Thus in pragmatic terms, the growing interest and MIP on the proceeds used in this strategy are liken a federal income tax that compounds monthly. While the strategy may help cash flow, it also reduces the net estate since the growing debt is an item which is a liability to the estate.

It seems reverse mortgages are still considered mortgages of the house rich but cash poor. It seems we were too good at selling this concept before fiscal 2010.


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