Currently viewing the tag: "Reverse Mortgage"
Mortgagee Letter 2010-34
Some borrowers can now expect to receive more money from their reverse mortgages. The Department of Housing and Urban Development (HUD) announced Mortgagee Letter 2010-34 that makes some substantial changes to the reverse mortgage (HECM) program, including lower expected interest rates. While the mortgagee letter was widely anticipated as a formal announcement of further reductions in reverse mortgages loan amounts (PLF), an unexpected addition to the rule resulted in lower expected interest rates. For some younger borrowers, the lower rates will yield higher loan amounts and therefore, more loan proceeds to pay off existing mortgages which could result in more applicants qualifying for the HECM. While the dust settles, existing reverse mortgage applicants should stand by to see what outcome the effects of this new mortgagee letter will have on current applications in process.
Reverse Mortgage counseling has taken another turn in the wrong direction in my opinion. The counselors now wield more influence over the borrower’s ability to get a reverse mortgage, whether or not they are qualified to do so. During the process of reverse mortgage counseling, counselors are required to give a pass/fail exam to the borrower who may or may not receive the certificate and may or may not pass go to get the reverse mortgage. If the borrower does not demonstrate basic knowledge then the certificate is not issued. Here is my problem with that.
The U.S. Department of Housing and Urban Development (HUD) announced today that $79 million (seventy-nine million dollars) will be made available for a broad range of housing counseling including how to qualify for a reverse mortgage in fiscal 2010. In times like these when reverse mortgage counseling can cost as high as $125, the additional money is a welcoming sign that more free reverse mortgage counseling should be forthcoming.
This funding represents a 27% increase over last year. HUD says the primary benefits of the program are to expand homeownership opportunities, improve access to affordable housing and preserve homeownership. Here is a list of some of the types of counseling the funds will pay for:
I thought it would be necessary to post this article just after my last “Lowest Reverse Mortgage Fees” because there are definitely some issues of concern about the ongoing costs of reverse mortgages, or any FHA loan for that matter. The last article defined the reasons for the dramatic decrease in up-front closing costs and fees associated with obtaining the reverse mortgage while this article aims to discuss the ongoing fees and charges that appear on a borrower’s reverse mortgage statement and thus, are added to the loan balance.
With all of the advanced warning and instructions we received from the state and many other sources, there can be no gray area when it comes to who has to have a license to originate loans in Arizona and how to get one. This is not the case for some loan officers who continue to ignore the SAFE Act requirements set by lawmakers that took affect on July 1, 2010.
