HUD Website Reflects New HECM Loan Limits

image With the new HECM loan limits “target date” of November 1st rapidly approaching, I’m starting to think the Mortgagee Letters are just a couple days away.  HUD has already updated FHA Connection and their website to reflect the new nationwide loan limit of $417,000, so we have got to be close.

If you head over to HUD’s FHA Mortgage Limits page and search for what the HECM loan limits are, $417,000 comes up.  HUD updated the website on 10/13/08 so call me crazy but it looks like the target date of November 1st might actually happen….

NRMLA did report that the Office of Single Family Housing was drafting the Mortgagee Letters (one for loan limits and one for origination fee caps) last week so maybe we will see them in the next week?

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  • I have been seeing allot of information about the new HECM lending lime but very little on the new proposed fee structure that lenders will be able to charge. Does anyone out there have an idea about what the new fee structure may look like?

  • Unfortunately, the bankrate article by Dr Don doesn’t answer the question posed by the person asking the question. They asked what he thought of a reverse mortgage for someone in their 70’s that lives on a small income.

    He mentions they are problematic if both borrowers have to leave the home for health requirements. That’s a bigger issue than having a reverse mortgage and that’s like blaming the rain for your wipers needing to be replaced.

    He mentions that the homeowner cannot tap into the equity in their homes for needed home repair or other expenses which is absolutely untrue, THAT’S one of the great things about reverse mortgages, they can be used for ANYTHING. If he meant to say that if the borrower was completely tapped out through use of the reverse mortgage and then needed MORE money, then he should have said that.

    He offered little justification for what he said. In this case, someone in their 70’s (the average age for reverse mortgage clients by the way) with little income that’s looking for ways to supplement their income (or they wouldn’t have been asking in the first place) should seriously consider a reverse mortgage. Its the easiest way to turn an illiquid asset into cashflow or income.

    Do they sell when the market is down, will they get a fair value for their home, what are the real estate commissions, what will they have to sell because it won’t all fit into the smaller home or apartment? Do they rent, how do they know rent won’t cost the same amount, are they healthy enough to move? Did they live all their 70 some years just to scrimp on every single item they need to get by?

    Dr Don should have said, yes, a reverse mortgage is a great alternative to someone in their 70’s living on a small income that wants to supplement their monthly cash flow and protect their current assets in a troubled market. The Dr may need a checkup!

  • RickM,

    Or maybe just maybe there is such a significant probability that the couple will be permanently out of their house in a such a short period of time that the upfront costs of the loan alone make the reverse mortgage a poor financial alternative at best.

    BUT you are absolutely right, whatever the author intended as a limiting factor, he should have clearly stated, otherwise, his example is next to useless.

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