You would think our government would pull their heads out of their ass and see the potential for a real “economic stimulus” program.

They should LOWER the MIP insurance premium for reverse mortgages. If millions of seniors are holding back from purchasing large items and they are looking for additional income and there are trillions of dollars of equity in seniors homes?????? Am I the only ONE seeing this??? Unreal. No wonder the economy is in such poor shape. There are a bunch of complete idiotic morons running the country.

Not necessarily. The MIP is not only 2% lump-sum up front, but these are obviously negative amortization loans in which the costs of the MIP is factored into the mortgage amount as most seniors roll costs in. There is also a .5% MIP charge monthly which equates to even more MIP insurance going into the pot as the loan increases month to month.

I read somewhere that the MIP fund is actually decreasing. Well, this would not be due to reverse mortgages. This is just poor management along with forward mortgages constantly defaulting. If these products are “insurance” based, then they should clearly see the lack of risk in Reverse mortgages due to no monthly mortgage payments along with the amount of equity left in the home when the mortgage is taken out. Most likely, the default rate on a reverse mortgage will be very low. Sooner or later the housing market will improve and homes will start to accumulate equity again. This will lessen the risk even more, so the insurance based product theory doesn’t really worry me to much nor should it affect the MIP funding to continue to be 2%.

If someone competent other than our government would actually manage the funds right, the MIP upfront fee could easily be dropped to 1.5%. Hell, even 1.75% would be a start. Why should the seniors have to pick up the bill? Not to mention my obvious comment on more reverse mortgages would not only give seniors more money to dump into the economy, but would also produce revenue for Title Companies, mortgage companies, Appraisal companies and so on and so on which would even dump more money in the economy. It’s called Macro Economics.