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Increasing Restrictions & Possible Lower Lending Limits May Spur the Return of More Proprietary Loans

Having absorbed the recent elimination of federally-insured reverse mortage products, principal limit reductions and increased underwriting requirement many ask “when will we see proprietary reverse mortgages again?”. Good question. Presently our national lending limit remains at $625,500 through the end of this year thanks to HUD’s mortgagee letter in December 2012. Will HUD continue to extend this lending limit? Perhaps but unlikely. In the wake of a record 1.7 billion dollar bailout from the treasury and unrelenting scrutiny from lawmakers due to projected losses in FHA’s insurance fund, many may feel little sympathy for seniors with higher valued homes. In a risk-adverse and financially insecure political climate few will advocate for retirees they consider well-off. Additionally many industry leaders expect a return to a $417,000 national lending limit in 2014. Politics and budgets aside it comes down to the pivotal role of money. Mike McCully with New View Advisors said…

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