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The Present & Future Impact of new Lending Ratios
Last week we saw two watershed events for the federally-insured reverse mortgage program. Revised Principal Limit Factor tables and the inclusion of younger non-borrowing spouses under the age of 62. First a little background. The pace of changes to the HECM program has been swift with FHA’s new authority to make substantial changes via Mortgagee Letter rather than the lengthly rule-making process. In other words, FHA and HUD can act quickly to modify the reverse mortgage program as they see fit. Second, the displacement of non-borrowing spouses has been a thorn in our collective side and a ready source of negative news stories which featured elderly individuals being foreclosed upon. In light of these two factors HUD released new Principal Limit Factor tables which go into effect August 4th. First the good news. Younger borrowers aged 62 to 74 will see…
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