Last Friday U.S. Department of Housing and Urban Development approved the use of LIBOR Indexes for all FHA Arms and HECM products.  HUD felt the change was necessary because LIBOR is both an international index determined on the basis of the world economy and an index that has become very popular in the secondary market.  It will be interesting to see if these changes will cause lenders to alter their programs and make the reverse mortgage market more competitive.  To read a copy of the document issued by HUD click the link below.

Adjustable Rate and Home Equity Conversion Mortgages—Additional Index