There may be a future for a new Federal Housing Administration hybrid reverse mortgage product, according to statements made today by representatives for the National Reverse Mortgage Lenders Association at the group’s eastern regional meeting in New York City.
The potential comes after the NRMLA board held recent meetings in Washington, D.C. with White House economic policy staff, Peter Bell, NRMLA president and CEO told conference attendees.
“It was an exploratory meeting to see what they know about reverses and to feel out their interest. One outcome was we discussed the concept of working with [the Department of Housing and Urban Development] to develop a hybrid reverse mortgage,” Bell said.
The hybrid would combine an initial fixed rate option upfront with a variable rate for future draws on the loan.
“We feel this would be better for all concerned,” Bell said. “It would be better for consumers and better for the FHA fund.”
The reception was positive, he said, with a considerable degree of interest for pursuing the new product idea at the White House, which could work in turn with HUD to develop the product.
The Saver reverse mortgage, developed by HUD and launched in late 2010, is an example of a similar product developed as an alternative to the “standard” reverse mortgage products currently offered by FHA.
“The Saver is a model for what can be done,” said James Brodsky, legal counsel for NRMLA, noting the interest and enthusiasm from a presidential advisor as to how a new reverse mortgage product could fit into the administration’s plans.
Written by Elizabeth Ecker