A Bright Future

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Professor Sees Reverse Mortgages as a Cornerstone for Retirement Planning

reverse mortgage news

It’s no small endorsement. Well known Columbia Business school professor Christopher Mayer not only sees a bright future for reverse mortgages but he’s going into business himself. Mayer is tapering his teaching responsibilities at Columbia to serve as CEO of the startup reverse mortgage lender Longbirdge Financial….

 

For more reverse mortgage tools, technology & training visit www.ReverseFocus.com

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Against The Wind

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2014 Presents Challenge & Opportunity for HECM Industry

reverse mortgage newsThe classic Bob Seger song laments, “Against the wind. I’m older now but still running against the wind.” Both retirees and our industry are pressing against the resistance of retirement funding and a more restrictive product for us to offer. The good news is that the reverse mortgage industry and the HECM product have proven their staying power having endured one of the worst housing crashes in history, an economic crash and numerous product changes. Also increasing home values have buoyed production with an increase of 15% through November.

The next headwind will be felt once HUD enacts the financial assessment in it’s effort to reduce risks of borrower defaults and subsequent claims against FHA’s insurance fund. But are some of these recent developments a blessing in disguise? Columnist Phil Hall in the National Mortgage Professional Magazine says yes. Hall says, “A new oversight regimen may finally help to erase the lingering doubts surrounding the product.” If we look at the true obstacle for market growth it’s not the 15% reduction in principal limits, the elimination of the Standard Fixed rate or increased insurance premiums. It’s our industry’s reputational woes. Hall cites one originators experience…

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October Surprise?

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Reverse Mortgage Reform Bill Passes, Awaits President’s Signature

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August or October Surprise? FHA may be able to use a scalpel rather than an axe when it comes to making reforms to the federally insured reverse mortgage or Home Equity Conversion Mortgage program. Late last Tuesday night the Senate granted the Federal Housing Administration the authority to make changes via mortgagee letter rather than the lengthly rule making process in passing House Resolution 2167, better known as the Reverse Mortgage Stabilization Act of 2013. Now the bill awaits the President’s signature. This is a pivotal development because without this authority harsher measures may have been employed to protect the American taxpayer and FHA’s mutual mortgage insurance fund from projected losses. It is expected that FHA will issue a mortgagee letter late this month outlining changes with an implementation date of October first. One HUD official said. We are looking at issuing ML by end of August and, ideally, October 1 for implementation.

Scalpel or an Axe? HECM Reforms.

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Without Congressional Authority FHA is Faced with Hard Choices

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Reverse Mortgage News

HUD would prefer to take the surgeon’s approach making fine tuned adjustments to the federally-insured reverse mortgage or HECM program. Presently it is left with the axe of harsh change unless Congress acts to give them the authority needed before the beginning of next fiscal year October 1st. The blunt approach was mentioned in a recent Senate Banking Committee hearing last week when Assistant Secretary of HUD Carol Galante reassured senators that they have no plans to bring back the standard fixed rate product.

Assistant Secretary Galante mentioned another option…more principal limit reductions across the board. “If we can’t make those nuanced changes, we are going to have to say the entire amount [that can be borrowed] is going to be just lowered for everybody across the board.”

 

 

Is this a Silver Lining?

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Borrowers overwhelmingly choosing Standard Adjustable. Why?

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The Reverse Mortgage Program

HUD says the reverse mortgage program is generating positive cash flow. That’s good for the short term but does not erase the future liabilities to the mutual mortgage insurance fund for previous years books of HECM business which is expected to result in claims for property values under the final loan balance and tax and insurance defaults. In it’s recent quarterly report to congress, HUD reports that the reverse mortgage program is…

 

The Must Stay

Reverse Mortgages Must Stay to Meet Demand. With the words of one senator asking why not stop the reverse mortgage program ringing in our collective ears, it is comforting to hear that housing experts see things differently. The Bipartisan Policy Center Housing Commission…

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