BREAKING: New PLFs Released

More money for older HECM borrowers, substantially less when younger non-borrowing spouse present

Today HUD released new PLFs (Principal Limit Factors) which now include a table for younger co-borrowers.  Jerry Wagner, the President & owner of IBIS Software which provides  origination software and information for both HUD and HECM Lenders released a very helpful comparison chart (see downloads below) which helps identify the impact of the new lending ratios.

Here is a summary of the changes:

  • HUD made the changes via Mortgagee Letter 2014-12
  • Younger primary borrowers will see a modest increase in their PLFs until the Expected Rate reaches 5.37% and higher (see inset below).
  • Older borrower will see a substantial increase in proceeds until the Expected Rate nears 7% and higher
  • The new Principal Limit Factors go into effect for FHA case numbers assigned on or after August 4th, 2014
  • Borrowers who have not closed their loans and have FHA case numbers prior to August 4th may opt to use the new PLFs (see ML 2014-14 for requirements)
  • The table for younger non-borrowing spouses (18-61 years old) only applies if at least one borrower meets the minimum HECM age requirement of 62. Proceeds will be based on the age of the youngest spouse.

 DOWNLOADS:

NEW 2014 PLF Table     PLF Change Analysis (IBIS Software)   Mortgagee Letter 2014-14

NEW PLF Analysis
NEW PLF Analysis

 

 

 

 

 

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Every Problem Once was a Solution

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What once worked may be problematic today

Reverse Mortgage Business Marketing

Oddly our topic that every problem once was a solution reminds me of the now extinct standard fixed rate HECM. It was a solution to borrowers seeking maximum funds or a guaranteed interest rate which became a problem loan for FHA when assessing risk and performance. This is a prime example of how behaviors, business models or marketing may become problems once they are not up to date anymore. On a personal level we can become angry with ourselves wondering why we act a certain way in a given circumstance. On the surface it may appear to be irrational. But is it? It’s not so much that a current behavior or pattern is irrational but rather that it no longer works. What was once a solution is now a problem.

You may have adapted a new strategy or way of doing business based on…

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Is this Our Next Growth Market?

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Our next opportunity for growth may be right under our noses

Increase Reverse Mortgage Loan Production

It’s no surprise that in the wake of the housing crash, increased regulation, lower lending ratios and the HECM product redesign that many are seeking ways to expand their market and increase their loan production. Many have been successful in part in making inroads to financial professionals and others with builders, developers or real estate professionals. Some look to new advertising campaigns and public relations campaigns to help increase industry volume. Yet there is one sleeping giant that could easily be overlooked. FHA…

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

Download video transcript here