FHA Commissioner Sees Bright Future For Reverse Mortgages
December 2nd, 2008 | by admin Published in FHA, News, Reverse Mortgage | 5 Comments
HeraldNet writer Tom Kelly does a great job covering reverse mortgages. His most recent article, Even now, reverse mortgages a viable option describes how even with the credit crunch, the reverse mortgage industry grew for the 19th straight year. While the 4.3 percent growth in HECM volume isn’t close to what the industry has seen previously, with loan limits raised and fees capped at $6,000 people are expecting a surge of applications.
"One reason for the lower (reverse mortgage) volume was the uncertainty over the loan limits," said Peter Bell, president of NRMLA, the nonprofit trade group based in Washington, D.C. "There were so many people waiting on the sidelines to see what would happen. Why would you want to close a loan a few weeks ago when you could borrow less and get a higher interest rate?"
While the industry has seen the loan limits increase to $417,000, Kelly writes that Lenders vow to push vigorously to lift the ceiling to $625,500 as soon as possible, especially given the exit of all jumbo reverse mortgage products. Raising the loan limits to $417K helps people in certain areas of the country, but in places like California the new loan limits don’t provide much more benefit.
The best part of the article comes from the story about FHA Commissioner Brian Montgomery’s mother and reverse mortgages, which Kelly describes below:
FHA Commissioner Brian Montgomery, who will leave his post when the current administration exits in January, said there is a bright future ahead for reverse mortgages, despite the current credit crunch. He has tried to convince his mother to take out a reverse, but she, like many seniors, has been suspicious of the concept.
"I told her that I was her son and would always be looking out for her best interests," Montgomery said. "I also told her that I administered the program for the United States of America and thought it was a pretty good idea."
- Related Posts
- Affluent Retirees Using Reverse Mortgages Until Investments Rebound
- NRMLA Expects Mortgagee Letter For New Reverse Mortgage Loan Limits Soon
- Former FHA Commissioner: HECM Budget Shortfall Amounts to Rounding Error
blog comments powered by Disqus .
December 3rd, 2008 at 6:57 am (#)
The FEES were only capped @ 6000.00 for the FHA origination. It makes it sound like that’s the Total cost to get a reversr mortgage.
December 3rd, 2008 at 11:06 am (#)
Hey Folks, God Bless All of You This Holiday Season!
The HUGE drop in home values has greatly affected the
number of loans being processed. It was not just the “wait and see” attitude of qualifying owners. The
20 to 30% drop in home values “devoured” the equity we
need to have to write up a HECM. The increased limit to $417,000 was not enough. The incresed limit to $625,000 will be much better. Now would be a GOOD TIME TO PRAY!
December 3rd, 2008 at 9:24 pm (#)
I saw an ad in the Naples paper that they promise the lowest origination fee and well as giving an extra $250
if they can’t beat the price. I would hate to think this business can be prostituted! We are here to do the right thing. Have people forgotten that!
Whats the take on cutting fees to grab a client? and really, what is the true cost. You get what you pay for.
December 4th, 2008 at 8:24 am (#)
I agree with the critic and feel that before taking out a reverse mortgage, one must understand what is a reverse mortgage and the pros and cons of reverse mortgages fully in order to make an informed decision.
January 9th, 2009 at 9:51 am (#)
In regard to the critics. It never fails to amaze. Here’s the bottom line, if you’ve got a senior who can’t survive and keep up with payments. Who cares if it’s income or cash, they are both accomplishing the same thing. The two examples that where brought up only point to the diversity with this product as to what it can accomplish. As time goes on I’m thrilled to see more creativity with solving so many situations with this program for seniors.As a loan officer that relies on education as a central component of “the process” It remains super important that we surround ourselves with continuing education and police ourselves before the industry as a whole becomes a breeding ground for more government intervention. serve a senior today!