Generation Mortgage recently announced that is closed its first HECM for purchase for one of its retail customers. As part of the Housing and Economic Recovery Act of 2008, borrowers can use reverse mortgage proceeds combined with a cash down payment to purchase a new principal residence.
"John and Dorothy are very excited about owning their new home," says Phil Goss, Reverse Mortgage Professional, Generation Mortgage. "They are repeat clients – we worked together to get them a reverse mortgage on their previous home, which they sold in 2008. We kept in touch and when I updated them on the implementation of the HECM purchase option, they immediately began looking for a new home. They closed in early March and are busy making the final arrangements so they can move in within the required 60 days."
The roll out of the HECM for purchase has been slow due to lenders concerns over certain aspects of the product. The Mortgagee Letter HUD published last week should help alleviate those concerns but in states like Massachusetts and Texas, borrowers will still have to wait until other details are addressed.
According to an email from Sherry Apanay, Senior Vice President of Generation Mortgage, the company will likely release the HECM for purchase to a select group of correspondents
this next week.