Seniors who want to tap their home equity through a reverse mortgage might want to keep a close watch on the Federal Housing Administration (FHA).
The Home Equity Conversion Mortgage (HECM) program, a reverse mortgage backed by the FHA, is showing signs of substantial stress, and U.S. Department of Housing and Urban Development (HUD) Secretary Shaun Donovan has a plan to relieve the pressure. Read the rest of this entry »
In the next few weeks, we will find out how the FHA’s reverse mortgage program has done in the past year. This is an important benchmark because the reverse mortgage program has lurched along, creating big losses for the FHA and its reserve system.
The FHA’s reverse mortgage program has undergone a number of changes in the past year, and now HUD says more are to be expected.
HUD is also telling reverse mortgage lenders they can add additional requirements above the FHA standard to help reduce program claims…or are they? Read the rest of this entry »
Taking on a reverse mortgage can be a smart move or a financial disaster, depending on the type of loan and your circumstances. Avoid these mistakes to make a reverse mortgage a smart move.
Mistake #1: Taking out the wrong mortgage
Jane Blume’s story is one many middle-aged Americans can relate to: Her aging parent was beginning to run out of money. The money her mother spent her whole life saving was quickly dwindling. When Social Security was no longer enough to help Blume’s mother cover her bills, maintain her home and pay for her every-day expenses, she suggested her mom apply for a reverse mortgage.
“Older Americans born in the pre-war era have a stigma about reverse mortgages,” says Eric Declercq, national retail leader for reverse mortgages at MetLife. “They [don't] want to strip their equity.” Read the rest of this entry »
The Office of the Comptroller of the Currency (OCC) recently issued a Consumer Advisory titled “Reverse Mortgages: Are They for You?” The advisory is designed to educate older homeowners on the ins and outs of reverse mortgages and their possible alternatives.
The advisory offers basic facts borrowers should know, the costs and benefits associated with the loan product, as well as some important rules to consider when opting for a reverse mortgage: Read the rest of this entry »
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