I is good to read some positive comments. Even though the concept may gain in popularity, it is hard to believe that volume will be up unless something is done to drastically change the principal limit situation.

If I had just heard of reverses, and the current principal limit was applied, I would still think this is a great program. For one thing, the borrower can't go by “what used to be”, but what is-now. They're not getting “less” money-the program just calculates it this way. It's still better than not getting to use any of the equity in their home. They weren't doing this 3, 6, or even 10 years ago, so they have nothing to compare to-in other words, they don't know about the reduced principal limit. Besides, it helps them retain more of their equity, since most reverses last only 5-7 years. And if reducing the principal limit helps investors happy, maybe that will help us retain this program for the future.

The main problem with the principle limit decrease is that many borrowers no longer qualify for a reverse mtg. I think it's over 70% of all r/m's are done to eliminate current mtg's and now, many of those seniors no longer qualify… so that is the main reason for the complaints of the principle limit reduction.

Many seniors I looked at for fixed rate HECMs certainly look like they would get less “money” if they got a FHA Case Number on 9/30/2009 or 10/1/2009. I sure would like to know how they would receive the same amount. It seems either you or I need some help on this matter. So why don't you explain why I am so wrong.

REVGUYJIM,

Pollyanna could not have said it any better.

Now tell me what should I tell the seniors who call and tell me that the numbers I and my peers are giving them now are a lot less than they were a few months ago. Is it a figment of their imagination?

You sound more like a sales management executive than an originator. I read the same kind of reasoning in the book of Exodus in the Bible regarding the making of bricks. Take away more “straw” but keeping the same amount of bricks. That worked then, or did it?

Critic,

What I meant was simply that the reverse is still the only tool that allows equity from the home to be used without required monthly repayment, and while you and I are aware of what “used to be” the vast majority of the outside world is not. I'm no analyst, but it seems to me that if the principal limit was so high in the beginning so as to possibly put the investors at risk, perhaps it was too high in the first place. Maybe once these details have been adjusted, the reverse will have a better reputation and will be more accepted, allowing the LO's to actually be able to make a living.