Reforms may hinge on Actuarial Report


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Despite improvements, Secretary Carson pushes for 3 key changes

While we’ve seen no official mortgagee letter or Congressional action on recently-proposed reforms to the Home Equity Conversion Mortgage- some key changes were restated last week in HUD Secretary Ben Carson’s written remarks to the House Financial Services Committee. Legislative proposals such as the elimination of a national lending limit and the removal of the HECM from FHA’s Mutual Mortgage Insurance Fund may hinge on next month’s Actuarial report to Congress. The report details the financial health of the program. However, the potential elimination of HECM-to-HECM refinances could be enacted outside of Congress by the FHA as an administrative change that doesn’t require Congressional approval. While opposed by key industry stakeholders, such a change could be held forth to lawmakers as confirmation of the agency’s continued commitment to the stewardship of the program should next month’s report reveal increasing financial liabilities.

The water is not quite under the bridge

Truth be told, recent fiscal year insurance claims provide little if any insight as to how effective previous policy changes may have been. Think of the reverse mortgage program’s financial liabilities as a large river. Notable incidents upstream will not be felt

HECM reforms the focus of Congressional hearing



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Recent improvements, racial targeting, and some surprising suggestions

Despite the impeachment drama in our nation’s capital, the House Financial Services Committee’s hearing on the HECM was held as scheduled. It shows that some Congress members view of the HECM has evolved and some interesting proposals were put forth from the expert witnesses…

Documents referenced:
“Preventing Foreclosures on Seniors Act of 2019” [DRAFT]
A bill to conform HECM lending limits with FHA area limits

VIDEO REPLAY OF HEARING

HUD Secretary committed to HECM changes


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Secretary Ben Carson’s prepared remarks for recent Senate hearing confirm HUD’s mission to enact key HECM reforms

While politicians squabble over the government’s role in making homeownership a reality, older homeowners who wish to use their home’s value to age in place were left out of the debate in the hearing room. That doesn’t mean the HECM program is not facing some significant changes. In his prepared remarks, Secretary Carson outlines three changes- two which would require Congressional approval, and the third a mere policy change by the Federal Housing Administration (FHA)…

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BREAKING- New Collateral Assessment may require 2nd appraisal

 

FHA’s New Collateral Risk Assessment will require a 2nd appraisal when determined that 1st appraisal is ‘inflated’

BREAKING- FHA announced today the enactment effective October 1st that all HECM loans must undergo a Collateral Risk Assessment to determine if the first appraisal is inflated or at market values. If it is determined that the appraisal exceeds the assessment’s guidelines, then a second appraisal will be required which can be financed into the closing costs of the loan. Read the mortgage letter

HUD Reins in HECM Program: Industry Reacts

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Exclusive Interview with Shelley Giordano from Funding LongevityScreen Shot 2017-09-01 at 9.41.37 AM

This week we discuss:

  • How HECM lenders will compete under the new rules
  • Potential changes to the how the HECM is viewed by seniors and HECM professionals
  • The recent changes in light of the HECM’s mission
  • Impact of lowered ongoing FHA premiums on the principal limit growth (line of credit)
  • The ‘ruthless’ option

REGISTER-WEBINAR
HUD is soliciting feedback from interested parties until September 29, 2017. Feeback can be submitted to: answers@hud.gov

Official Mortgagee Letter 2017-12 “Home Equity Conversion Mortgage (HECM) Program: Mortgage Insurance Premium Rates and Principal Limit Factors

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NEW HECM Rules Announced

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HUD Announced New Finalized HECM Rules for 2017

reverse mortgage newsHUD announced their finalized rules enacting several policy changes to the Home Equity Conversion Mortgage (HECM) program which will go into effect later this year. What do these changes hold in store for interest rate caps, disclosure requirements, and new loan assignment guidelines and how will the final rules change the face of reverse mortgage originations? Welcome. This, is the Industry Leader Update. I’m Shannon Hicks.. This episode is brought to you by ePath Digital, providing real-time leads for today’s reverse mortgage professional.

After much anticipation and speculation, HUD announced their finalized rule changes for the Home Equity Conversion Mortgage. The rule changes were first proposed and opened to public comment last May. The rules could be seen as a continuation of the agency’s mission to solidify the reverse mortgage program under the Reverse Mortgage Stabilization Act of 2013 which gave HUD expanded authority to quickly enact additional rule changes as they saw fit. The new rules will go into effect September 19, 2017.

When it comes to reverse mortgage originations, loan officers and lenders will be required to…

Download the video transcript here.

HECM Changes: For Better or Worse?


Do Recent HECM Changes Help or Hurt our Industry & Consumers?



Certainly one could argue that the recent changes to the federally-insured reverse mortgage have improved the reputation of the program in the eyes of financial planning professionals and the media alike. While additional consumer protections are admirable, do the numerous policy changes signal a turn for the better or worse?

man-holding-scaleA recent MarketWatch article “Could the tide be turning on reverse mortgages?” asks just such a question. Columnist Alicia Munnell opens with “after decades of skepticism and reports of scandals, the tide appears to be turning for reverse mortgages”. The New York Times Business section recently led with a story on the ‘revival of the reverse mortgage’.

While there may be a revival of the reverse mortgage in the consciousness of the mainstream media and in the minds of media pundits, our industry is not experiencing a revival but a retraction, as HECM endorsement volumes…

Download a transcript of this episode here.

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