When it comes to how reverse mortgage loans are originated a line has been drawn in the sand: March 2nd, 2015. In two short weeks the long-awaited or dreaded Financial Assessment goes into effect forever changing the way HECM loans are qualified. This is a game-changer.
Continue reading5 Things You May Not Know about the Financial Assessment
[vimeo id=”112870126″ width=”625″ height=”352″]
Five Take-Aways from the Financial Assessment
Two weeks ago today we hosted a national webinar on the Financial Assessment with over 800 participants. Since that time the proverbial dust has begun to settle allowing us to absorb more details for the new way of doing business. That said there are five key facets of the Financial Assessment that may be overlooked or misunderstood.
1- Credit Scores. One could reasonably conclude that anytime a lender is checking a credit report the applicant’ts credit score is a key factor in determining their eligibility. Fortunately unlike traditional mortgages where the applicant’s credit score not only determines eligibility but the interest rate the HECM program has no such consideration. The credit report is soley for examining a borrowers history of paying obligations in a timely manner thus indicating their willingness to meet the financial obligations of a reverse mortgage.
2- Non-HECM liens. Recently uncovered is the requirement that non-HECM liens where the borrower
Download a transcript of this episode here.
Looking for more reverse mortgage news, commentary and technology? Visit ReverseFocus.com today.
A Plan for Change
[vimeo id=”112868270″ width=”625″ height=”352″]
Preparing Yourself for the Financial Assessment
“The reed which bends in the wind is stronger than the mighty oak which breaks in a storm”.
Though centuries old this familiar quote could have been written for the reverse mortgage professional. The last two years have given us both numerous and monumental changes to the federally-insured Home Equity Conversion Mortgage Program. That change is here to stay regardless of our misgivings, approval or apprehension which leads us to the question, ‘how can we prepare for change?’.
Here are five points to ponder in your planning for 2015 and the brave new world of reverse mortgage lending.
1- Adjust your mindset. This is perhaps our most challenging task to date. Even if we strongly disagree with distribution limits, the financial assessment or seasoning requirements for non-HECM liens we must first get ourselves into a mindset of acceptance and implementation. The good news is we have a few months to settle our misgivings and concerns before we reach out to new potential borrowers once the Financial Assessment is enacted. If we skip this step our prospects will sense our hesitation or lack of belief in the program and respond in kind.
2- Prepare your approach. Rather than a script write down the…
Download the video transcript for this episode here.
Looking for more reverse mortgage tools, training & technology? Visit ReverseFocus.com today.
The HELOC to HECM Dilemma
With the recent release of HUD’s Financial Assessment guidelines our focus was primarily centered on the new requirements future borrowers will have to walk through to qualify for a federally-insured reverse mortgage or Home Equity Conversion Mortgage…
Continue readingDo Rising Interest Rates Trigger Slower Home Appreciation?
As loan interest rates rise banks & lender’s refinance business will dwindle forcing them to loosen lending standards to compete for potential borrowers. While this mostly applies to traditional mortgage lending relaxed lending standards result in more qualified buyers increasing housing demand and prices alike.
Continue readingOur Industry’s Choices will Determine our Future
Due to economic and regulatory pressure the HECM program has evolved rapidly in recent years. The truth is the choices that our industry collectively makes today will determine the outcome of tomorrow. What changes can we anticipate in the coming year?
Continue readingNon-Borrowing Spouse Pitfalls?
Non-Borrowing Spouse Pitfalls. As with any new policy often more questions arise than answers. HUD’s recent Non-Borrowing Spouse policy is no exception to this rule. While benefiting younger spouses with the peace of mind of being able to remain in the home after the death of their spouse what pitfalls and problems can arise?
Continue readingAn Ounce of Prevention?
Preventative Measures: Curbing Technical Defaults. An old saying reminds us “ An ounce of prevention is worth a pound of cure.” When it comes to technical defaults for HECM borrowers we may be seeking a cure but there are some preventative measure that can be taken today.
Continue readingNon-Borrowing Spouse Policy: A Wrench in the Gears?
What may have gone unnoticed by some may in fact turn out to be one of the most momentous policy decisions in the history of the HECM program: the non-borrowing spouse provision.
Continue readingThe Non-Borrowing Spouse Surprise?
The Home Equity Conversion Mortgage or HECM program still only allows borrowers 62 or older but now adjusts proceeds based on the age of the younger non-borrowing spouse. In essence it gives the non-borrowing spouse the right to remain in the home indefinitely during a ‘deferral period’ provided requirements are met. That said there are a few key points we must now to fully comprehend the benefit and risks of this policy change…
Continue reading