California Senator Issues Letter About New Reverse Mortgage Loan Limits
September 16th, 2008 | by admin Published in FHA, News, Reverse Mortgage | 12 Comments
I’ve received dozens of emails from RMD readers asking about the status of the HECM loan limits but I haven’t had any updates. Yesterday I was forwarded a letter that was mailed out by California Senator Barbara Boxer regarding the HECM loan limits (thanks Heather). According to Senator Boxer, the HECM loan limit has been increased to $625,000. Below is the 1st paragraph from the letter.
Thank you for contacting my office to express your views on Home Equity Conversion Mortgages (HECMs), reverse mortgages backed by the Federal Housing Authority (FHA). As you may know, previous legislation increased the size of the loans the FHA could offer but failed to raise the limit for HECMs. I am pleased to report that the Housing and Economic Recovery Act of 2008 – which passed Congress and was signed into law on July 30, 2008 – permanently raises the HECM loan limit to $625,000.
- Senator Barbara Boxer
I’m not saying that this is final and I wouldn’t be surprised if HUD’s lawyers are still working on this… but maybe we are getting closer to a decision? Click the link below to read a copy of the letter from Ms. Boxer.
Update: NRMLA just informed me that Senator Feinstein, also from California sent out a letter that stating that $417,000 is the new HECM loan limit… great to see California’s Senators are on the same page. Bottom line, HUD has not yet made a decision.
Technorati Tags: Reverse Mortgage,HECM,News,Housing Bill,FHA,HUD
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September 16th, 2008 at 7:43 pm (#)
This is just further proof that the delay in issuing a mortgagee letter is confusing the general public. Our President signed this bill into law a month and a half ago. The mortgagee letter announcing the change should have been issued no more than a week later.
Does HUD realize how many potential customers are going into foreclosure as we speak that would NOT be in a similar situation should this rule be instituted? I’m guessing their “team of lawyers” are being paid by the hour and aren’t feeling the heat of a foreclosure notice.
September 17th, 2008 at 4:20 am (#)
Do we pay these people?
September 17th, 2008 at 4:40 am (#)
What Senator Boxer stated is true. She is referring to the maximum and is correct. Senator Feinstein referred to the minimum and is also correct.
For once these two got it right if you read what they wrote. As usual the information has no value or practical application and is just surface information.
September 17th, 2008 at 7:05 am (#)
Good day,
Frustrated originator, I agree with you 100%. This goes to show you that our legislators passed a bill they did not understand, in short, they were not ready to pass this bill! HUD does not have their act together, they never do. It is obvious they were not ready to have this bill passed and signed into affect.
The entire “Housing Recovery Act” is a mess. This bill started out to be a simple straight forward bill and after partisan politics got involved, it has turned out to be a bill that most people do not understand including our legislators.
Why doesn’t HUD just make this simple, either raise the limit to a flat national amount to $417,000 or some flat amount between $417,000 and $625,000. Forget the formulas and the complicated methods proposed to get to the limit, make it simple HUD, get off your high Horse and stop trying to be creative, you do not know how to be creative in the first place and you are only muddying up the water. HUD and our legislators are hurting many seniors and the industry over their negligents ! God help us if any one had pure old fashion common sense!!
Best regards to all,
The Great American Philosopher
http://www.thegreatamericanphilosopher.com
BY: John A. Smaldone
September 17th, 2008 at 9:11 am (#)
Here’s an email that I received from my Senator, dated 8/1/2008. Should be interesting to see what happens.
“Dear Ms. Sharrow:
Thank you for taking the time to contact to share your thoughts regarding reverse mortgage limits.
I agree with you that reverse mortgages can serve as a vital source for retirement income and am pleased to report to you that the Housing and Economic Recovery Act (H.R. 3221), which became law on July 30, 2008, increases the FHA reverse mortgage limit as well puts in place important consumer protection reforms. More specifically, as part of the FHA reform measure contained in H.R. 3221, the bill establishes a nationwide loan limit of up to $625,500 for reverse mortgages, sets a maximum limit on the lender fee, and protects seniors from having to buy other financial products with their reverse mortgage.
Thank you once again for contacting me. I value your advice. Please do not hesitate to contact me in the future if I can be of further assistance to you.
Sincerely,
Norm Coleman
United States Senate”
September 17th, 2008 at 10:22 am (#)
As most of you probably know, the new limit is somewhere between $417,000 and $625,500, so neither Senator is wrong. And with everything on their plates, they certainly don’t have time to make sure their letters agree.
The bill is 700 pages long and quite complicated. There were many parties involved in its creation with differing views, and it was very difficult to come to a consensus. The beauty of our system is that everyone has input, but it can be frustrating.
The invididuals I’ve met in senior positions at HUD are very capable, and I believe that they are working hard to help solve one of the most difficult financial situations in the history of our country. It’s a difficult job, and they deserve our patience.
September 17th, 2008 at 11:25 am (#)
I say let’s sic Sarah the Pitbull on Meg Burns, and see
who wins. My guess is that senior members of the legal staff at HUD are very preoccupied with deciding which lucrative offer of private sector employment to accept, as the election draws nearer. This leaves little time for the public’s business, and means that they are short-handed to boot. At this rate, we’ll be lucky if the ML’s are reviewed and approved for issuance by the New Year.
September 17th, 2008 at 11:31 am (#)
Oh yeah, and another thing … who is so naive to believe for a moment that a U.S. Senator writes his or her own replies to constituent letters?! Folks, these are undergraduate college interns who churn out these fluffy PR bromides!!! Geez …
September 20th, 2008 at 11:44 am (#)
[...] September 20, 2008 at 10:44 am California Senator Issues Letter About New Reverse Mortgage Loan Limits According to Senator Boxer, the HECM loan limit has been increased to $625,000. Below is the 1st [...]
September 25th, 2008 at 3:49 pm (#)
I received the same letter from Senator Boxer on the $625,000 loan limits. Right away I knew a staffer wrote the reply to my request for a time frame on the HUD implementation and county limits. As an originator of reverse mortgages I am constantly told not to quote a national loan limit because the bill HR3221 was so poorly written that HUD lawyers will figure out what was actually passed. Why was not one of these capable people from HUD consulted prior to writing the confusing language on loan limits?
September 27th, 2008 at 8:03 pm (#)
Will someone please contact HUD. There are some Seniors out here like myself and my wife who have been waiting for months for this Reverse bill. All of our Social Security checks go to pay our adjustable mortgage. If we could just get our Reverse completed, we would have $1,500 a month to live on. As it stands now, we are living on whatever funds we can scrape up each week. We were scammed on our mortgage refi about 4 years ago and the man upped our balance by $30,000 and gave us a terrible adjustable on pretense of paying all of our bills off. We got a court judgment against him for $30,000 and he filed bankruptcy. Oh how badly we need this Reverse in N.C. under the new law.
April 15th, 2009 at 4:09 pm (#)
Where is Frank Sousa? Do you have his phone # ?