While the sky is not falling, the impacts are undeniable
In our previous episode we discussed what changes to expect as a result of HUD’s most recent changes to the federally-insured reverse mortgage. This week we will examine some real-life scenarios on how the HECM overhaul will impact your business and your future borrowers.
Beyond absorbing the recent HECM overhaul with it’s lower lending ratios, reduced interest rate floor, and a higher upfront FHA insurance premium should prompt two crucial questions- how will this impact my potential borrowers? How should I adjust my marketing and sales approach as a result?
So what’s the impact on new HECM borrowers? Well first we must take into consideration two important factors: higher upfront costs with origination fees and the increased one-time FHA insurance premium and second- the lower recurring costs of the loan due to reduced ongoing margins, and the diminished lending ratios which lower the amount borrowed.