HUD Secretary committed to HECM changes


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Secretary Ben Carson’s prepared remarks for recent Senate hearing confirm HUD’s mission to enact key HECM reforms

While politicians squabble over the government’s role in making homeownership a reality, older homeowners who wish to use their home’s value to age in place were left out of the debate in the hearing room. That doesn’t mean the HECM program is not facing some significant changes. In his prepared remarks, Secretary Carson outlines three changes- two which would require Congressional approval, and the third a mere policy change by the Federal Housing Administration (FHA)…

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BREAKING- New Collateral Assessment may require 2nd appraisal

 

FHA’s New Collateral Risk Assessment will require a 2nd appraisal when determined that 1st appraisal is ‘inflated’

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

HUD Reins in HECM Program: Industry Reacts

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Exclusive Interview with Shelley Giordano from Funding LongevityScreen Shot 2017-09-01 at 9.41.37 AM

This week we discuss:

  • How HECM lenders will compete under the new rules
  • Potential changes to the how the HECM is viewed by seniors and HECM professionals
  • The recent changes in light of the HECM’s mission
  • Impact of lowered ongoing FHA premiums on the principal limit growth (line of credit)
  • The ‘ruthless’ option

REGISTER-WEBINAR
HUD is soliciting feedback from interested parties until September 29, 2017. Feeback can be submitted to: answers@hud.gov

Official Mortgagee Letter 2017-12 “Home Equity Conversion Mortgage (HECM) Program: Mortgage Insurance Premium Rates and Principal Limit Factors”

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NEW HECM Rules Announced

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HUD Announced New Finalized HECM Rules for 2017

reverse mortgage newsHUD announced their finalized rules enacting several policy changes to the Home Equity Conversion Mortgage (HECM) program which will go into effect later this year. What do these changes hold in store for interest rate caps, disclosure requirements, and new loan assignment guidelines and how will the final rules change the face of reverse mortgage originations? Welcome. This, is the Industry Leader Update. I’m Shannon Hicks.. This episode is brought to you by ePath Digital, providing real-time leads for today’s reverse mortgage professional.

After much anticipation and speculation, HUD announced their finalized rule changes for the Home Equity Conversion Mortgage. The rule changes were first proposed and opened to public comment last May. The rules could be seen as a continuation of the agency’s mission to solidify the reverse mortgage program under the Reverse Mortgage Stabilization Act of 2013 which gave HUD expanded authority to quickly enact additional rule changes as they saw fit. The new rules will go into effect September 19, 2017.

When it comes to reverse mortgage originations, loan officers and lenders will be required to…

Download the video transcript here.

HECM Changes: For Better or Worse?


Do Recent HECM Changes Help or Hurt our Industry & Consumers?



Certainly one could argue that the recent changes to the federally-insured reverse mortgage have improved the reputation of the program in the eyes of financial planning professionals and the media alike. While additional consumer protections are admirable, do the numerous policy changes signal a turn for the better or worse?

man-holding-scaleA recent MarketWatch article “Could the tide be turning on reverse mortgages?” asks just such a question. Columnist Alicia Munnell opens with “after decades of skepticism and reports of scandals, the tide appears to be turning for reverse mortgages”. The New York Times Business section recently led with a story on the ‘revival of the reverse mortgage’.

While there may be a revival of the reverse mortgage in the consciousness of the mainstream media and in the minds of media pundits, our industry is not experiencing a revival but a retraction, as HECM endorsement volumes…

Download a transcript of this episode here.

Looking for more reverse mortgage news, commentary, and technology? Visit ReverseFocus.com today

The Shrinking HECM?


Challenges to HECM Growth & Measuring Success

Reverse mortgage endorsement volumes have continued their slide after a brief recovery. Despite the increased acceptance of the press and financial planning community and the ever-growing need of soon to be retirees, the Home Equity Conversion Mortgage industry finds itself challenged to grow. Welcome to the Industry Leader Update.

Perhaps we are using the wrong standard by which we measure our industry’s success in reaching age-eligible homeowners. After all, can we honestly say it is an apples-to-apples comparison to compare early HECM volumes with their limited loan qualification guidelines with the reverse mortgage of today?
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Download a transcript of this episode here.

Looking for more reverse mortgage news, commentary, and technology? Visit ReverseFocus.com today

More HECM Changes Coming…

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More Changes for HECM on Horizon from HUD

looking-aheadIf you think the dust has finally settled in the wake of numerous HECM changes, think again. HUD announced their intention to codify recent program changes while also adding new consumer protections to the federally-insured Home Equity Conversion Mortgage program.

Sit down, take a few Tylenol along with a pot of coffee and settle in to read HUD’s proposed rule changes. Perhaps a better approach is a brief summary of the proposed rule changes presented here in the next few minutes.

First, HUD reiterates their first-year distribution limit as 60% of the principal limit or the total mandatory obligations plus 10%. What’s new is the forward commitment that the initial 12-month distribution cap is never to be less than 50% of the principal limit. Keep in mind that principal limit factors can be changed outside of the rule making process via a mortgagee letter as market conditions warrant.

Second: H4P changes. HECM for purchase borrowers must complete HECM counseling prior to signing a sales contract or…

Download a transcript of this episode here.

Looking for more reverse mortgage news, commentary, and technology? Visit ReverseFocus.com today.

HECM: A Mortgage or Social Program?

Is the federally-insured reverse mortgage a social program or a mortgage loan? The question should be addressed as it goes to the heart of recent program changes, restrictions and requirements. While few argue the HECM program is a social program many often lament that the loan no longer serves the needy, cash-poor or typical borrowers or the past due to principal limit reductions and further loan restrictions.

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