President Trump has directed HUD to examine the ‘viability’ of the Home Equity Conversion Mortgage and to take other steps to strengthen FHA and the housing GSE’s Fannie Mae & Freddie Mac…
BREAKING- FHA announced today the enactment effective October 1st that all HECM loans must undergo a Collateral Risk Assessment to determine if the first appraisal is inflated or at market values. If it is determined that the appraisal exceeds the assessment’s guidelines, then a second appraisal will be required which can be financed into the closing costs of the loan. Read the mortgage letter
The number of allgeged ‘foreclosures’ have raised the eyebrows of lawmakers tasked with overseeing HUD’s budget and the HECM program…
Continue readingTo say that HUD’s most recent changes to the Home Equity Conversion Mortgage were met with mixed reviews would be the understatement of the decade.
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A traditional mortgage broker called her saying “there’s just not enough money in the new reverse mortgage so I told her we can’t help”. Are your referral sources closing the doors to a potential client unnecessarily? Where do you begin? (There is no transcript for this episode)
Stabilizing the HECM program? HUD signaled more potential changes for FY 2019.
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While only a small percentage of potential borrowers with high-value property values would qualify, there are a few important caveats you should keep in mind. One note, for more in-depth discussion I would recommend reading Jim Veale’s article in Reverse Mortgage Daily’s LinkedIn group which can be found on the link on this page.
This is only our 2nd change since 2009 but this year’s increase was larger, much larger in fact than the previous increase. Effective January 1st 2017 HECM borrowers with higher valued properties would benefit from a nearly $11,000 increase from $625,500 to $636,150. This year’s increase is much more substantial…$43,500 more. The increase only applies to HECMs with an FHA case number issued on or after January 1st, 2018. Remember, the line in the sand is the date of FHA case number issuance, not the closing date…
FHA Loan Limits Page | Mortgagee Letter 2017-17
In the wake of being blindsided by the most recent HECM changes, industry leaders are calling for stability…
Continue readingWith the HECM becoming increasingly unpredictable, many reverse-only lenders are expanding to offer traditional mortgages…
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Sudden industry product changes are always coupled with challenges. Reverse mortgage professionals are seeing first-hand the impacts that HUD’s October surprise will have on borrowers seeking to refinance and payoff their mortgage and those seeking to purchase a home with a HECM.
For several weeks on this show, we’ve run down several short and long-term consequences of HUD’s reduced lending ratios, the returns of origination fees, and new insurance premium pricing. Today we are going to look at two scenarios- the borrower with a higher mortgage balance and a HECM for Purchase scenario.
Despite the financial assessment, several borrowers who would meet the guidelines are seeking to eliminate an existing mortgage who still have a nearly 50% existing loan-to-value ratio. In this example, we have a 72-year-old single borrower with a home valued at $375,000 and an outstanding mortgage balance of $175,000 being well under 50% of the home’s present value. Prior to October 2nd, this individual would only need to come in with $125 at closing after the lender credited or waived the origination fee. However, that same borrower would need to come in with over
