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.