Can you clarify the what this verbage in the American Recovery and Reinvestment Act of 2009 means? (for the layman). Does it have any ramifications in our 2008 or 2009 income taxes?

So the president signs the bill today. We are at less than 11 months and counting for how long the increased limit will be available to us. Is there any word from HUD on when we will be able to offer it? Tic-toc.

Will someone please explain to me the reason for an
arbitrary lending limit. If the value is there, whether the home is worth $50,000 or $5,000,000, what
difference does it make to the validity of the program. I would think since Reverse Mortgages have been around for over 20 years now, there is plenty of data available to substantiate how well the HUD/FHA
Insurance program is working. (That even with the decrease in property values in most areas of the Country, the Insurance Fund when Seniors pass and the debt comes due has remained financially solvent.)

No, I do not; perhaps I should have written “death or other causes” Surely though, HUD/FHA must have these numbers. It just seems to me that a number of Seniors who have homes in the $500,000 to $1,500.000 range with mortgages in the 4, 5, or $600,000 level are
being shut out from a reverse mortgage when their need is very pressing. I realize this market was formerly serviced by the private “Jumbo” Lenders, prior to the current financial debacle; But as to when those Lenders will return is anybody’s guess. In the last couple of days I’ve talked with two Seniors who are really hurting to make their current forward mortgage payments due to a downturn in their business (Real Estate and Software; home values $800,000 and $1,500,000 with mortgages of $400,000 and $600,000. Selling is not an option in today’s market ). At the same time, I see all parties dickering over a relatively small raise in
the Lending limits. The genuine success of the FHA HECM program (I believe– but only HUD/FHA has the proof.) should lead those far knowledgeable than I to see the wisdom of allowing this program to serve ALL Seniors regardless of Home value, just as long as the FHA Actuarial Insurance Formula still works. I may be wrong but somewhere along the trail I heard that the FHA HECM program was so financially successful for the Government that a considerable part of the MIP was being sent to the General Revenue Fund; But, I have no proof of that statement.

In reference to the Cynic’s comments, I did read the article and the corresponding responses. I also read NRMLA’s bulletin on the amount of time it may take to issue the Mortgagee Letter for the new lending limit. While I understand the issues raised of the complexities that HUD is dealing with concerning all of the legislation and regulations that have fallen on them at the same time as the new leadership is trying to get up and running, I would point out that the $625,500 Maximum Claim limit is in affect already in Alaska and Hawaii. At least the issue of the MIP that was raised in NRMLA’s bulletin should have been addressed at the time the higher lending limit was established for those places.

As for the churning issue and the limiting of the origination fee by HUD, there was no way for borrowers or lenders to foresee the increased lending limit actually passing Congress and being signed into law. In the current financial market, if the borrowers decide they wish to pursue more funds with a reverse mortgage, and the higher lending limit provides them with substantially more in proceeds, are the originators the ones who will again pay the price for the borrowers’ need? Many of us already discount our loans when we are refinancing a HECM.

Shall we make bricks without straw?

Mr. Nelson,

Not only have there been rumors about current draining of the fund to pay off losses on FHA forward loans and provide money for the government’s general fund but there are also rumors that some in Congress would like to spend the available cash on their pet projects.

The available cash is not excess monies. What appears to be in excess are funds held in reserve for future losses in the current outstanding HECM pool. If a significant number of those loans turn into substantial losses where will the money come from to pay off those losses if not, in part, from the cash in excess of current needs????

Looking at the NRMLA announcement today, it seems FHA is very reluctant to move to $625,500. Some of the logic does not appear founded without some type of actuarial study and analysis of potential loss in values. In fact it seems strange that there would be an argument based on “the cushion” between current market values and yesterday’s lending limit on homes with values over $417,000. That argument was never mentioned as to values in Alaska, Hawaii, Guam, or the Virgin Islands when some of those limits were taken beyond $417,000.

But there is no need to throw caution to the wind. These arguments need an open forum. For many originators, this is that forum.

Peter Bell, the NRMLA staff, and the NRMLA HUD Committee are working hard on these issues. They need some space to maneuver in but that should not stop or interfere with the debate over these ideas.

Your opinion is as good as mine. Mine might be better educated in the need for some independent studies but without them all of the prognostications are pure speculation at best.

Excuse me how much money will attorneys, CPA, Realtors,Title companies,cities,counties,financial planners,banks with higher margins, hud witgh higher pmi fees, counsler talk for 40 minutes and companie earns 75-125.00.
. we will have more trusts to review more time explaining programs to cpa’s financial,planners, and familly why we are spending inheritance money. While we will be capped at $6000.00 Reators will get thier 6%, banks will recive higher margins more income. hud 2% $12000.Where is NRMLA Or Namb who fights for us??????????????/