President Signs Housing Bill, Reverse Mortgages Receive New Loan Limit and More

Early this morning President Bush signed the Housing and Economic Recovery Act of 2008 with his economic team on hand, including Treasury Secretary Henry Paulson who helped negotiate the package with the Democratic-controlled Congress.

Reverse mortgage originators have been anxiously anticipating the Bill which gives HECM’s a national loan limit of $417,000 and a max of $625,000 in high cost areas.  HR 3221 also includes the following:

  • Home Purchase product authority.
  • Co-op product provisions.
  • Origination fees of 2% on the initial $200,000 in maximum claim amount and 1% on the balance thereafter with a cap of $6,000
  • Prohibitions on requiring the purchase of annuities and other financial products.
  • Restrictions around cross selling financial products.
  • Requirements on counseling protocols, funding and practices that promote independence and quality in counseling.

It’s estimated that HUD will issue a mortgagee letter in the next 60 days to provide a more detailed explination of the changes.  NRMLA expects the changes will take effect on January 1, 2009.

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H.R. 3221: The Housing and Economic Recovery Act of 2008

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  • What a sorry way to penalize brokers. My corporation has been in business for 24 years with no audit problems, very limited number of brokers, all clean. Referral business exceeds 90% so we must be keeping our clients happy.
    Why don’t you just come out and say you want to shut down the economy put every body out of business and let the government do it all. We can be that socialist state that you want. You are breaking the spirit of this country one business at a time. I am sorry I am an American. I hope I can find some one who will hire a VET.

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