Some See the HECM Financial Assessment As A Benefit

Shannon Hicks April 24, 2017 5

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Two Years Later the Financial Assessment Receives Mixed Reviews

The implementation of the HECM Financial Assessment was met with mixed reviews when it was launched in April 2015. While many industry professionals have remained critical of the new underwriting guidelines some welcome the assessment as see it as a net benefit.

reverse mortgage news‘Every loan is a problem loan’

The seismic shift of the Financial Assessment’s restrictive and complex underwriting guidelines have many feeling that the reverse mortgage underwriting has now matched or surpassed traditional mortgage underwriting guidelines. Bill Smith with Reverse Mortgage west told Reverse Mortgage Daily, “Tighter regulations have resulted in tougher underwriting standards that have made most HECM loans far less routine. Complaints from my colleagues that ‘every loan is a problem loan’ are much too frequent and clearly not what used to be when I started.” Not only is the sales cycle prolonged but the assessment has limited the number of qualified applicants carving out many who would have been previously eligible for the loan.

The Paper Chase

The complexities of the reverse mortgage are difficult enough for many to communicate to a borrower. Now many find themselves spending considerable time gathering the required documentation needed for the assessment which reduces their time spent originating loans…

Download the video transcript here.

 

5 Comments »

  1. Jerry Hanley April 24, 2017 at 7:20 am - Reply

    The ability to pay off non-mandatory debt with HECM proceeds resulting in a qualified borrower can’t come fast enough. How this was ignored or overlooked when FA was initially rolled out is hard to understand, especially for someone with many years of foward lending experience and no newbie to reverse.
    Giving credit where it is due, the ability to disapate HECM proceeds is a big help for borrowers on tight budgets. However, disapation along doesn’t always get the job done.

  2. George Lagarde April 24, 2017 at 1:03 pm - Reply

    Im seeing too many Seniors who really need the Program not qualifying because of the FA or due to the LESA amounts. This has to be addressed by the FHA in the future.

  3. Jerry Meyers April 24, 2017 at 2:28 pm - Reply

    FA needs a total makeover. I am constantly running up against borrowers who prior to FA would have qualified for a HECM. I am constantly finding more and more seniors who really need this loan and can’t qualify. This is a “needs” based product, always has been and always should be.

  4. Ron April 26, 2017 at 6:58 am - Reply

    we’ve come to a place where if the borrower doesn’t need a HECM, they can get one. too often, the homeowner for which this program, as I understand, was designed, can’t qualify.

    this is a great program with a tremendous need. It does need some serious tweaking.

  5. Cliff Riddle April 26, 2017 at 10:59 am - Reply

    As all the other comments above The law makers need to get off their a== and get out in the field before they qualify to make the
    laws, regs. or what ever you want to call it.
    A college education with no common sense can sure screw things up and every new one they maker illiminates that meany more that
    needs it . Like the hell with the poor ? A challenge to you law makers just go on one R.M. from start to finish that needs a LESA .

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