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Our Industry’s History Reveals the Whys of Change
I’m sure I am not alone in thinking ‘what the heck happened to the reverse mortgage program’. It’s only natural to find yourself pondering this quandary if you’ve been originating federally-insured reverse mortgages four years or longer. While asking the question will not change anything, we can put the puzzle pieces together with a short retrospective. Let’s take a short trip down memory lane.
2005: A year after creating guidelines for refinancing a HECM loan the first reverse mortgage refinances hit the market. A boon for lenders and borrowers alike as home values are appreciating rapidly, much to rapidly in hindsight.
2006: After years of struggling with county by county lending limits a national lending was established at $417,000. This was an immense help to borrowers with higher valued homes in counties where the average home value was much lower allowing them to substantially increase their benefits. In an appreciating market the risk was negligible.
2008: There were headwinds indicating a possible slowdown in the housing market but the crisis had not yet…
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