While the immediate increase in the number of investors buying HECMs is a good and noble goal, the way Fannie Mae has chosen to achieve that objective will result not only in human suffering and financial costs but also potential long-term damage to the reputation of the HECM program. In a comment on March 28th, […]

On February 27 and March 10, 2009, RMD published Are Reverse Mortgage Proceeds Really Income? and And How Can Reverse Mortgage Proceeds be Income?  The purpose of those articles was to dismiss the idea that RM loan proceeds are income. The contention in those articles is that RM proceeds are nothing more than loan proceeds […]

Over at Broker Universe, Atare Agbamu wrote an interesting article about why he thinks HUD should revoke Mortgagee Letter 2008-38.  The ML was a surprise and caused a bit of stir because of the way it defines a HECM as a non-recourse loan.  Prior to ML 08-38, HUD’s policy for non-recourse was:

Last week I received a call from a senior that had requested information about reverse mortgages over a year ago.  I haven’t been originating loans in order to focus on growing RMD, so when I received the phone call it caught me a bit off guard.
The gentleman had requested some basic information about reverse mortgages, […]

On February 27, 2009, RMD published Are Reverse Mortgage Proceeds Really Income? In that article the point was made that reverse mortgage payouts result in the increase of the amount due a creditor (a liability) and is not income which increases the borrower’s equity. In accounting literature, income is a temporary category of equity.
On both […]

On February 12, 2009, two commentators on this website initiated a discussion of the appropriateness of using the word “income” to describe RM proceeds. Having waited for well over three months to opine on this issue, it seems now is the appropriate time to do so.
In November 2006, a well respected and long-time reverse mortgage […]