Reverse Mortgage Rates – February, 18 2009

Not much change this week, but watch out for next week. Yesterday, Tuesday the 17th, the 10-year Treasury rate fell by 22 basis points.

We’re no longer in territory where the HECM Principal Limit is maxed out. This week, only Treasury-based HECM’s with a margin of +268 or less can pay the HECM maximum Principal Limit. Ditto for LIBOR-based HECM’s with margins of +245 or less. And current margins are higher than these figures.

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  • HI

    I GOT A REVERSE MORTGAGE TWO YEARS AGO.

    WITH ALL THAT IS GOING ON WITH THE BANKS

    IS OUR LINE OF CREDIT SAFE? SHOULD WE TAKE

    OUR MONEY OUT OF BANK AMERICA? WE WERE TOLD A

    LINE OF CREDIT WITH A REVERSE MORTGAGE WAS SAFE.

    THANKS

  • Hi Jim,

    Your Line of Credit funds should be fine.

    When you closed your HECM reverse mortgage, FHA backed up BofA’s lien on the title to your home with a 2nd position lien of their own. The HECM rules call for that in case BofA ever failed before you sold your home or passed away. This unique step means that HUD/FHA can guarantee that your access to Line of Credit funds and growth will continue even if BofA fails.

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