October changes?

Take the survey and make your best guess

It’s that time of year when we hold our collective breath in the hopes that HUD will be gentle when it comes to enacting further changes to the Home Equity Conversion Mortgage.

There have been reports that the Financial Assessment has reduced defaults significantly, yet even so continued HECM claims from earlier books of business (reverse mortgages written in previous years) are likely to continue. In other words, no product changes can erase future losses in pending HECM loan terminations.

Major HECM changes typically come every two years. What should we anticipate in the final months of 2019? October 2017 brought us PLF reductions, single-tiered upfront FHA insurance premiums and a reduced interest rate floor from five to three percent. 2018 being the interim year brought us the Collateral Risk Assessment or the second appraisal rule.

There are no clues as to what further changes HUD may enact for the federally-insured reverse mortgages. However, we are interested in what you see as the most likely changes we will see enacted beginning in October.

Take our survey and let us know your thoughts.
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Counseling Survey Reveals Borrower Motivations

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Pre-Assessment Survey Sheds Some Light on Borrower Perspectives

reverse mortgage news

While the survey didn’t account for recent borrowers challenged with the Financial Assessment, the research does pull back the curtain on the motivations behind older homeowners who seek out a reverse mortgage.

At the NRMLA annual meeting in San Francisco this month, Stephanie Moulton, associate professor at the John Glenn College of Public Affairs gave industry participants a sneak peek of the survey.

The project was funded in part by the MacArthur Foundation and HUD seeking to uncover the factors leading older homeowners to get a HECM, terminate their loan or ultimately decide against proceeding with the loan. Enlisting the help of ClearPoint Credit Counseling, a leading HECM counseling agency, researchers tracked the responses of over 1,700 individuals who received

HECM counseling in the years 2012-14 with an average age of 70. The sample was divided into three segments: those who got a reverse mortgage and currently hold the loan, those who got a HECM and terminated the loan and those who decided against…

Download a transcript of this episode here.

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