While Australia has one of the most robust government pension programs in the world many Australians are unprepared for retirement not unlike older homeowners in the U.S.
Continue readingAustralians Told to Monetize Their Home for Retirement
Researchers present HECM fixes last week
How do you fix the reverse mortgage and expand its availability? Researchers presented their ideas last week
There’s no shortage of ideas when it comes to just how to strengthen the federally-insured reverse mortgage and expand its reach to older homeowners. Last Monday, the Brookings Institution hosted a symposium entitled “Reverse mortgages: Promise, problems, and proposals for a better market”. Participants included AARP’s Debra Whitman, Stephanie Moulton of Ohio State University, University of British Columbia professor Thomas Davidoff, Longbridge CEO Chris Mayer, and Laurie Goodman from the Urban Institute. The event is part of the Brookings Institution & the Kellogg School’s meetings on retirement security. These are not pending proposals for the Home Equity Conversion mortgage, nor are they being debated by lawmakers. However, these policy think tanks play an important role in our federal government and help shape public policy.
Industry Survey Results & AARP’s Response to HECM Changes
To say that HUD’s most recent changes to the Home Equity Conversion Mortgage were met with mixed reviews would be the understatement of the decade.
Continue readingA Perversion of the HECM?
AARP Frowns Upon Strategic Use of HECM in Portfolio Management
Creativity unlocks potential markets and opens up possibilities. It also makes you a target of critics. In recent years the long overlooked principal limit growth factor (or as many refer to it as the line of credit growth rate) has garnered a second look by financial professionals and our industry as a potential means of managing risk in a retirement portfolio.
“The use of reverse mortgages to hedge investment portfolios is a perversion of the original intent of the HECM Program, a misuse of FHA insurance, and puts the FHA insurance fund,” wrote AARP in a recent post. “HUD should take steps to ensure that homeowners who need money have access to HECMs, but should prohibit the use of HECMs for portfolio hedging.”
A perversion of the HECM program’s original intent? We have revisited the Home Equity Conversion Mortgage’s intent citing the language in which the program was created. Nowhere does it mention…
Looking for more reverse mortgage news, commentary, and technology? Visit ReverseFocus.com today
Sacred Cows
HECM Line of Credit (Principal Limit) Growth Rate in AARP’s Crosshairs
Sacred cows. Those tenets or beliefs that have been long held above reproach and which are seen as immune from criticism. For the Home Equity Conversion Mortgage, one benefit has been largely left unscathed, that is until now. AARP is recommending the elimination of the principal limit growth factor, or as many refer to it the credit line growth rate feature.
There are many competing and cooperating opinions that are voiced when HUD makes revisions to the federally-insured reverse mortgage program. Industry stakeholders, trade groups and consumer advocacy groups. While all groups stated goal is to serve the needs of aging homeowners, the proposed policies have profound differences in implementation, and most importantly on the future appeal and accessibility of the HECM to future borrowers…
Download a transcript of this episode here.
Looking for more reverse mortgage news, commentary, and technology? Visit ReverseFocus.com today
Is the Battle Over?
Is the battle over? HUD’s recent change to non borrowing spouse policy for Home Equity Conversion Mortgages is lauded by consumer advocates. June 12th may mark the end of the long fought battle between the Department of Housing and Urban Development, displaced borrowers and consumer advocacy groups.
Continue readingA Clear Solution Already Exists
When it comes to those seeking to solve the issue of senior’s aging in place perhaps on quote should be mentioned. “Sometimes we stare so long at the wrong things, we miss out on the RIGHT thing standing right in front of us”.
Continue readingAARP’s Six Fixes for Reverse Mortgage Program
The powerful lobying group AARP with it’s 38 million plus members has incredible clout in Washington DC. In a recent Senate hearing before lawmakers they suggested six changes to the federally insured reverse mortgage program.
Continue readingAn Unlikely Ally?
The prospect of not continuing to offer reverse mortgages has created unlikely ally for the program, AARP according to Sterne Ageel. Wall Street sees the continued profitability of the program and TWO: AARP is seen as a defender of the HECM. While AARP has long educated consumers…
Continue readingCash Burn or Last Resort? – Younger Reverse Mortgage Clients
AARP still calls it a ‘loan of last resort’. Will cash-burn by younger borrowers increase future defaults and foreclosures?
Continue reading