New Low Cost Reverse Mortgage Product Coming in October says HUD

During a conference call with industry leaders on Thursday, the Department of Housing and Urban Development said it hopes to roll out a new reverse mortgage product on Oct. 4, 2010.

The new “HECM Saver” will be a low cost reverse mortgage product insured by the Federal Housing Administration.  Unlike the standard HECM, which has a 2% upfront Mortgage Insurance Premium (MIP), the HECM Saver lowers the cost of entry for borrowers by charging only 0.01% upfront MIP.  The product will also have an annual MIP of 1.25%.

Offered as both a fixed and adjustable rate, the HECM Saver will have principal limit factors roughly 11-23% lower than the standard product.  While it doesn’t provide as much in proceeds to borrowers, it’s designed as low cost alternative to a home equity line of credit (HELOC).

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During the call, HUD described the HECM Saver as “merely a different pricing option,” noting the rest of the product will remain the same as the HECM standard.  However, many in the industry see it as a big opportunity to broaden the appeal of reverse mortgages by offering a low cost product to consumers.

HUD said a Mortgagee Letter describing the HECM Saver should be out before September 14th.

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  • Akoolkat,rnrnYou ain’t soundin’ like no cool cat I’ve ever met and I’ve met plenty in my lifetime. You may have made a short rant but nonetheless a rant it is. Be cool, man, real cool.rn

  • The private market will bore easily with the HUDs time to market for these programs and you’ll see them come out in droves once this starts. No MIP fine, but if they can increase the proceeds, even a little and its game on.

  • Michael,rnrnWhere have you been? For years, NRMLA and many of us have asked for a lower upfront cost product. This has been a point of discussion at NRMLA conventions for years.rnrnCo-op interests are not real estate. This is still a national program. None of that seems to get through to you. Co-op law in California is different than co-op law east of the Hudson.rnrnSince you are overwrought about the co-op situation, what you need to do is write a white paper on the subject with a suggested mortgagee letter, submit them to NRMLA, and watch how quickly the mortgagee letter is adopted, although I do not suggest you hold your breathe. Dazzle us with your brilliance. Youu2019ve got the weekend.rnrnUntil that happens just understand, securing personal property in the form of paper is not simple. Worse, the other holders of the same paper can decide who can buy foreclosed paper (a true contradiction in terms). In California we have had HUD refuse to insure even u201crealu201d real estate with too many restrictions on sale, etc. This is not peculiar to co-ops. I guess you have never come across such problems.rnrnI cannot wait to read your white paper.rn

  • This will be a welcomed product for the industry and should help a lot. However, Will the lower LTV affect the success of the program?rnrnAt least this will give us something new to talk about and the people with a good amount of eqity in thier home will benefit the most.rnrnJohn A. Smaldone

  • I agree with michaelpinter–why cant HUD get the ML out for co-ops in over 2 years? We cant get any definitive answer from them as to the status of the ML and it is angering and frustrating to the co-op unit owners who desperately need this product.

  • The potential market for the “HECM Saver” is likely 100 times greater than the market for ‘HECM Co-op’ -it’s a question of allocation of resources. Not much consolation for one in the middle of one of a relatively few number of co-op markets, but reality nonetheless.

  • Congratulations to FHA, Mr. Colin Cushman, Ms. Cheryl MacNally, Mr. John Nixon, Mr. Jeff Lewis, Mr. Craig Corn, and NRMLA!! This is potentially great news for the industry. rnrnNow it is up to us to originate this well designed product.

  • Mike,rnrnWho are you, pray tell? rnrnPlease note the tone of the michaelpinter comment. It is a shot at those in HUD who are working on this difficult ML. rnrnmichaelpinter condemns those at HUD for their slowness so let him write a white paper explaining how to make it work with a model ML. Otherwise, leave HUD alone. It already has its plate full trying to implement ongoing issues and work “kinks” out of the system. rnrnIt is time for those who complain and complain about the same old topics against HUD to try to be constructive. Since this is not the first time michaelpinter has complained about this issue, let him help HUD work out the problem rather than continuously complain about it in comments unrelated to it.

  • wealthone,rnrnThere is little MIP upfront but there is a 150% increase to ongoing MIP from where we are today. Please explain how they can raise principal limits without raising MIP.rnrnAs home appreciation rates go up, hopefully, OMB will reflect that change so that FHA can lower the reduction to Principal Limit Factors and within a few years, eliminate it altogether.

  • Akoolkat,rnrnYou ain’t soundin’ like no cool cat I’ve ever met and I’ve met plenty in my lifetime. You may have made a short rant but nonetheless a rant it is. Be cool, man, real cool.rn

  • The private market will bore easily with the HUDs time to market for these programs and you’ll see them come out in droves once this starts. No MIP fine, but if they can increase the proceeds, even a little and its game on.

  • Michael,rnrnWhere have you been? For years, NRMLA and many of us have asked for a lower upfront cost product. This has been a point of discussion at NRMLA conventions for years.rnrnCo-op interests are not real estate. This is still a national program. None of that seems to get through to you. Co-op law in California is different than co-op law east of the Hudson.rnrnSince you are overwrought about the co-op situation, what you need to do is write a white paper on the subject with a suggested mortgagee letter, submit them to NRMLA, and watch how quickly the mortgagee letter is adopted, although I do not suggest you hold your breathe. Dazzle us with your brilliance. Youu2019ve got the weekend.rnrnUntil that happens just understand, securing personal property in the form of paper is not simple. Worse, the other holders of the same paper can decide who can buy foreclosed paper (a true contradiction in terms). In California we have had HUD refuse to insure even u201crealu201d real estate with too many restrictions on sale, etc. This is not peculiar to co-ops. I guess you have never come across such problems.rnrnI cannot wait to read your white paper.rn

  • This will be a welcomed product for the industry and should help a lot. However, Will the lower LTV affect the success of the program?rnrnAt least this will give us something new to talk about and the people with a good amount of eqity in thier home will benefit the most.rnrnJohn A. Smaldone

  • I agree with michaelpinter–why cant HUD get the ML out for co-ops in over 2 years? We cant get any definitive answer from them as to the status of the ML and it is angering and frustrating to the co-op unit owners who desperately need this product.

  • The potential market for the “HECM Saver” is likely 100 times greater than the market for ‘HECM Co-op’ -it’s a question of allocation of resources. Not much consolation for one in the middle of one of a relatively few number of co-op markets, but reality nonetheless.

  • Congratulations to FHA, Mr. Colin Cushman, Ms. Cheryl MacNally, Mr. John Nixon, Mr. Jeff Lewis, Mr. Craig Corn, and NRMLA!! This is potentially great news for the industry. rnrnNow it is up to us to originate this well designed product.

  • Mike,rnrnWho are you, pray tell? rnrnPlease note the tone of the michaelpinter comment. It is a shot at those in HUD who are working on this difficult ML. rnrnmichaelpinter condemns those at HUD for their slowness so let him write a white paper explaining how to make it work with a model ML. Otherwise, leave HUD alone. It already has its plate full trying to implement ongoing issues and work “kinks” out of the system. rnrnIt is time for those who complain and complain about the same old topics against HUD to try to be constructive. Since this is not the first time michaelpinter has complained about this issue, let him help HUD work out the problem rather than continuously complain about it in comments unrelated to it.

  • wealthone,rnrnThere is little MIP upfront but there is a 150% increase to ongoing MIP from where we are today. Please explain how they can raise principal limits without raising MIP.rnrnAs home appreciation rates go up, hopefully, OMB will reflect that change so that FHA can lower the reduction to Principal Limit Factors and within a few years, eliminate it altogether.

  • Akoolkat,rnrnYou ain’t soundin’ like no cool cat I’ve ever met and I’ve met plenty in my lifetime. You may have made a short rant but nonetheless a rant it is. Be cool, man, real cool.rn

  • The private market will bore easily with the HUDs time to market for these programs and you’ll see them come out in droves once this starts. No MIP fine, but if they can increase the proceeds, even a little and its game on.

  • Michael,rnrnWhere have you been? For years, NRMLA and many of us have asked for a lower upfront cost product. This has been a point of discussion at NRMLA conventions for years.rnrnCo-op interests are not real estate. This is still a national program. None of that seems to get through to you. Co-op law in California is different than co-op law east of the Hudson.rnrnSince you are overwrought about the co-op situation, what you need to do is write a white paper on the subject with a suggested mortgagee letter, submit them to NRMLA, and watch how quickly the mortgagee letter is adopted, although I do not suggest you hold your breathe. Dazzle us with your brilliance. Youu2019ve got the weekend.rnrnUntil that happens just understand, securing personal property in the form of paper is not simple. Worse, the other holders of the same paper can decide who can buy foreclosed paper (a true contradiction in terms). In California we have had HUD refuse to insure even u201crealu201d real estate with too many restrictions on sale, etc. This is not peculiar to co-ops. I guess you have never come across such problems.rnrnI cannot wait to read your white paper.rn

  • This will be a welcomed product for the industry and should help a lot. However, Will the lower LTV affect the success of the program?rnrnAt least this will give us something new to talk about and the people with a good amount of eqity in thier home will benefit the most.rnrnJohn A. Smaldone

  • I agree with michaelpinter–why cant HUD get the ML out for co-ops in over 2 years? We cant get any definitive answer from them as to the status of the ML and it is angering and frustrating to the co-op unit owners who desperately need this product.

  • The potential market for the “HECM Saver” is likely 100 times greater than the market for ‘HECM Co-op’ -it’s a question of allocation of resources. Not much consolation for one in the middle of one of a relatively few number of co-op markets, but reality nonetheless.

  • Congratulations to FHA, Mr. Colin Cushman, Ms. Cheryl MacNally, Mr. John Nixon, Mr. Jeff Lewis, Mr. Craig Corn, and NRMLA!! This is potentially great news for the industry. rnrnNow it is up to us to originate this well designed product.

  • Mike,rnrnWho are you, pray tell? rnrnPlease note the tone of the michaelpinter comment. It is a shot at those in HUD who are working on this difficult ML. rnrnmichaelpinter condemns those at HUD for their slowness so let him write a white paper explaining how to make it work with a model ML. Otherwise, leave HUD alone. It already has its plate full trying to implement ongoing issues and work “kinks” out of the system. rnrnIt is time for those who complain and complain about the same old topics against HUD to try to be constructive. Since this is not the first time michaelpinter has complained about this issue, let him help HUD work out the problem rather than continuously complain about it in comments unrelated to it.

  • wealthone,rnrnThere is little MIP upfront but there is a 150% increase to ongoing MIP from where we are today. Please explain how they can raise principal limits without raising MIP.rnrnAs home appreciation rates go up, hopefully, OMB will reflect that change so that FHA can lower the reduction to Principal Limit Factors and within a few years, eliminate it altogether.

  • Akoolkat,rnrnYou ain’t soundin’ like no cool cat I’ve ever met and I’ve met plenty in my lifetime. You may have made a short rant but nonetheless a rant it is. Be cool, man, real cool.rn

  • The private market will bore easily with the HUDs time to market for these programs and you’ll see them come out in droves once this starts. No MIP fine, but if they can increase the proceeds, even a little and its game on.

  • Michael,rnrnWhere have you been? For years, NRMLA and many of us have asked for a lower upfront cost product. This has been a point of discussion at NRMLA conventions for years.rnrnCo-op interests are not real estate. This is still a national program. None of that seems to get through to you. Co-op law in California is different than co-op law east of the Hudson.rnrnSince you are overwrought about the co-op situation, what you need to do is write a white paper on the subject with a suggested mortgagee letter, submit them to NRMLA, and watch how quickly the mortgagee letter is adopted, although I do not suggest you hold your breathe. Dazzle us with your brilliance. Youu2019ve got the weekend.rnrnUntil that happens just understand, securing personal property in the form of paper is not simple. Worse, the other holders of the same paper can decide who can buy foreclosed paper (a true contradiction in terms). In California we have had HUD refuse to insure even u201crealu201d real estate with too many restrictions on sale, etc. This is not peculiar to co-ops. I guess you have never come across such problems.rnrnI cannot wait to read your white paper.rn

  • This will be a welcomed product for the industry and should help a lot. However, Will the lower LTV affect the success of the program?rnrnAt least this will give us something new to talk about and the people with a good amount of eqity in thier home will benefit the most.rnrnJohn A. Smaldone

  • I agree with michaelpinter–why cant HUD get the ML out for co-ops in over 2 years? We cant get any definitive answer from them as to the status of the ML and it is angering and frustrating to the co-op unit owners who desperately need this product.

  • The potential market for the “HECM Saver” is likely 100 times greater than the market for ‘HECM Co-op’ -it’s a question of allocation of resources. Not much consolation for one in the middle of one of a relatively few number of co-op markets, but reality nonetheless.

  • Congratulations to FHA, Mr. Colin Cushman, Ms. Cheryl MacNally, Mr. John Nixon, Mr. Jeff Lewis, Mr. Craig Corn, and NRMLA!! This is potentially great news for the industry. rnrnNow it is up to us to originate this well designed product.

  • Congratulations to FHA, Mr. Colin Cushman, Ms. Cheryl MacNally, Mr. John Nixon, Mr. Jeff Lewis, Mr. Craig Corn, and NRMLA!! This is potentially great news for the industry. rnrnNow it is up to us to originate this well designed product.

  • I’m amazed that HUD can roll this out in a few months, but has now taken over two years to figure out HECM’s for Co-ops and the product is still nowhere in sight.

    • The potential market for the “HECM Saver” is likely 100 times greater than the market for ‘HECM Co-op’ -it’s a question of allocation of resources. Not much consolation for one in the middle of one of a relatively few number of co-op markets, but reality nonetheless.

    • Michael,rnrnWhere have you been? For years, NRMLA and many of us have asked for a lower upfront cost product. This has been a point of discussion at NRMLA conventions for years.rnrnCo-op interests are not real estate. This is still a national program. None of that seems to get through to you. Co-op law in California is different than co-op law east of the Hudson.rnrnSince you are overwrought about the co-op situation, what you need to do is write a white paper on the subject with a suggested mortgagee letter, submit them to NRMLA, and watch how quickly the mortgagee letter is adopted, although I do not suggest you hold your breathe. Dazzle us with your brilliance. Youu2019ve got the weekend.rnrnUntil that happens just understand, securing personal property in the form of paper is not simple. Worse, the other holders of the same paper can decide who can buy foreclosed paper (a true contradiction in terms). In California we have had HUD refuse to insure even u201crealu201d real estate with too many restrictions on sale, etc. This is not peculiar to co-ops. I guess you have never come across such problems.rnrnI cannot wait to read your white paper.rn

      • Mike,rnrnWho are you, pray tell? rnrnPlease note the tone of the michaelpinter comment. It is a shot at those in HUD who are working on this difficult ML. rnrnmichaelpinter condemns those at HUD for their slowness so let him write a white paper explaining how to make it work with a model ML. Otherwise, leave HUD alone. It already has its plate full trying to implement ongoing issues and work “kinks” out of the system. rnrnIt is time for those who complain and complain about the same old topics against HUD to try to be constructive. Since this is not the first time michaelpinter has complained about this issue, let him help HUD work out the problem rather than continuously complain about it in comments unrelated to it.

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