In case you missed it…here’s what happened in reverse mortgage news this week.
HUD announced an extension of current HECM loan limits through 2011. The Department of Housing and Urban Development published Mortgagee Letter 2011-29 on Friday, which specified that the loan limit and maximum claim amount for FHA-insured HECMs will remain at $625,500 through December 31, 2011 .
A HUD official told conference attendees that HECM lenders can underwrite for taxes and insurance. Karin Hill, director of HUD’s Office of Single Family Program Development told attendees of a mortgage regulators conference, as reported by National Mortgage News: “There’s nothing wrong with that,” Hill told the conference attendees. “There’s nothing to say they can’t do it now.”
An RMI report showed low-volume states are seeing the largest HECM increase. Despite a national increase of 5.5% that is expected to taper into a decline by year-end, Reverse Market Insight reported that some states, including North and South Dakota, Minnesota and Iowa are seeing HECM increases of 52-62%.
A Wall Street Journal article on appraisals sparked a heated industry response. The appraisal system is broken, the WSJ article asserted. Low appraisals, whether the result of intentionally conservative lending practices or simply unprecedented bad times for home prices, WSJ said, are preventing the real estate market from rebounding. Days later, HousingWire reported on the heated aftermath.
HUD issued a mortgagee letter on counseling referrals. The Department of Housing and Urban Development issued new requirements for the referral list of housing counseling intermediaries that reverse mortgage lenders must provide for prospective borrowers, detailed in Mortgagee Letter 2011-26.
Written by Elizabeth Ecker