Despite the Federal Housing Administration releasing a new low cost reverse mortgage program earlier this week, lenders in Massachusetts can not originate the product according to the Division of Banks.
“No one has applied yet to offer the product,” said Jason Lefferts, spokesperson for the agency in an interview with RMD. “We have gotten a few calls, but no one has submitted any information.”
In order to offer new products in the state, banks, credit unions, and lenders closing the loans in their name need to submit a filing for approval of a reverse mortgage loan program. According to the DOB, lenders must send a written request for approval with a list of documents describing the product along with the disclosures provided to borrowers.
“It shoots my marketing efforts in the foot about these new programs,” said Jack Belles, President of Reverse Mortgage of New England. “We were getting ready to start advertising the product.”
For brokers, they will need to wait until the wholesale lenders get the product approved in the state. One would think since the HECM Saver is so similar to the Standard HECM it wouldn’t need approval, but it’s not the case in Massachusetts.