HUD Permits Applications For New Reverse Mortgage Loan Limit
October 10th, 2008 | by admin Published in FHA, NRMLA, News, Reverse Mortgage | 6 Comments
In response to the email NRMLA sent out the other day regarding the forthcoming implementation of the new HECM loan limits, they received a number of questions and forwarded them to HUD. The following four bullet points are “verbatim” answers NRMLA received from Meg Burns in an email message that she sent out to the various trade associations interested in this topic:
- The new mortgagee letters will be issued as quickly as possible. We are trying for a date no later than November 1, but cannot guarantee that date.
- In the interim, we will permit lenders to begin to take apps that reflect the new $417,000 loan limit, but lenders must also use the new origination fee calculation for these loans. These loans may not and cannot be insured until the ML comes out announcing the new limits.
- Loans for which you have already taken apps, but not yet closed, can be reworked; all final docs must reflect new max claim and principal limit. The new origination fee calculation must be used for these deals as well. And, again, these transactions cannot be insured prior to issuance of the mortgagee letter.
- Finally, new loans, for which apps are taken after the issuance of the ML must be in accordance with the new loan limit and new origination fee calculation (of course)
NRMLA will be reaching out to Meg later today, so if you have questions please forward them along to Liz or Peter and they will be sure to bring them to HUDs attention.
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October 10th, 2008 at 4:27 pm (#)
Does this mean we can take apps now for purchases for targeted November/December closings ?
October 10th, 2008 at 9:17 pm (#)
what will MIP be?? will it be 2% of the new claim amount?
October 11th, 2008 at 6:30 am (#)
Can you ask Meg when she thinks we will hear about the purchase with the HECM?
October 11th, 2008 at 7:20 am (#)
Rick,
MIP will continue to be 2% at closing and 1/2% annually.
The discussions about reducing MIP evaporated quickly as FHA saw home values dropping. They feared that falling home values could increase the claims size and claims rate on the mortgage insurance fund. Until then, the program had seemed to be over-funded. I doubt they will entertain any reductions in MIP until we’ve worked our way through this mess several years down the road.
October 13th, 2008 at 7:22 am (#)
I know we are all waiting for the lending limts letter, what about the coop provision, will the come out Nov 1st?
October 13th, 2008 at 7:29 am (#)
Mark, I’ve yet to hear about any of the other provisions