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The “New” Reverse Mortgage & Legacy Problems
The ‘New’ Reverse Mortgage. It’s a timely title considering the slate of recent changes to the HECM program and NRMLA’s Extreme Summit television ads which tout a new reverse mortgage. While one could accurately surmise we have a ‘new’ product we still face some of the same old challenges of years past. However some industry pundits are optimistic as evidenced in recent comments made to industry news leader Reverse Mortgage Daily. Let us examine both the new aspects of the federally insured reverse mortgage and the challenges which remain.
First principal limit factors. HUD’s revised Principal Limit Factor tables increase available proceeds most borrowers in the short term, that is until interest rates rise. Once interest rates begin to modestly increase an actual cut in available proceeds will be realized versus 2013 lending ratios. What is the forecast for the London Inter Bank Offered Rate index upon which HECMs are built?
A May 2014 Barron’s article said…
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