The Department of Housing and Urban Development is continuing to work on “critical” reverse mortgage program changes following a restriction to the program’s fixed rate reverse mortgage option, announced last week.
In a statement to U.S. News and World Report‘s Phil Moeller, in an article published this week, HUD Deputy Assistant Secretary Charles Coulter told the publication there are four fundamental changes needed, including restricting the upfront draw that is available to borrowers; implementing a financial assessment; establishing a required set-aside for tax and insurance payments and “addressing complications resulting from non-borrowing spouses.”
Following the initial changes announced, which eliminate the fixed-rate standard option, Coulter told U.S. News the agency is working with Congress to get all of the changes in place in a timely manner.
“HUD is actively developing policy to address these issues administratively and is also working with Congress to enable faster implementation of these critical changes,” Coulter told U.S. News. “If we are unable to make these changes in a timely manner, HUD may be forced to take, sub-optimal, short term measures to improve the economics of the program.”
U.S. News points to a recent study by Ameriprise finding that nearly half of older Americans say home equity falls into their retirement plans, with the new restriction on the reverse mortgage program making it harder to borrow against home equity in light of that trend.
Written by Elizabeth Ecker