When must a reverse mortgage be paid off? Can the loan be paid off early? What are the typical payoff options?Continue reading
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Seniors head back to retirement communities after the Covid pandemic
As reverse mortgage professionals, we often talk about the vast majority of seniors who want to age in place in their existing homes. This week we bring you the other side of this issue from MarketWatch…
Morningstar: Ilyce Glink: Speaks on the State of the U.S. Residential Real Estate Market
CBC: Canadian regulators cap reverse mortgage loan percentage
What are the actual occupancy rules for Home Equity Conversion Mortgages? The answer may surprise you as Dan Hultquist explains.Continue reading
HUD’s HECM Final Rules go into effect tomorrow (9/19/2017) and include in part:
- For fixed rate HECMs, only a full-funded LESA may be used.
- Partially funded LESA’s will distribute LESA funds two times a year to the borrower for the payment of property charges. Fully funded LESAs will directly pay the insurance or taxing authority, not the borrower.
- Initial distribution limits will remain in effect for the first 12 months, but cannot be reduced below a 50% distribution cap without additional rulemaking.
- Sellers are allowed to pay fees required to be paid by the seller under local or state laws, including the purchase of a home warranty policy.
- The seasoning of non-HECM liens looks at the 12 month period prior to the HECM closing.
- HELOCs (home equity lines of credit) are excluded from the 12-month seasoning requirement but are subject to first-year distribution limits.
- All HECM products and features must be disclosed to the borrower in a manner that is acceptable to the FHA Commissioner, regardless of the products offered by the particular HECM lender.
- Borrowers may lock in their Expected Interest Rate (EIR) prior to the date of loan closing or lock in their rate on the day of closing.
- The payoff of unsecured debts not secured by the property as defined by the Commissioner is a mandatory obligation.
GET FULL OFFICIAL TEXT OF FINAL HECM RULES HERE
John Lunde is the president and founder of Reverse Market Insight (RMI). They closely track the reverse mortgage (HECM) industry data points and trends.
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