In case you missed it… here’s what happened in reverse mortgage news this week.
HUD said it’s planning to combine existing reverse mortgage products. HUD is planning to create a new reverse mortgage loan program, while discontinuing the two programs—the Standard and Saver—as they are currently offered, according those familiar with the details. The new loan will come with new principal limit factors that range somewhere between the current Saver and Standard programs. Find out more.
AARP said it was disappointed with the HECM change process. In a statement emailed to RMD, an AARP representative said the organization was deeply disappointed that HUD can circumvent the rule making process and will exclude public comments from its considerations regarding new reverse mortgage rules.
The Wall Street Journal touted reverse mortgage benefits for wealthy retirees. WSJ delved into academic research on the Home Equity Conversion Mortgage Saver led by John Salter and Harold Evensky at Texas Tech that has effectively positioned the Saver loan as a safeguard against losses across other investments in a retiree’s portfolio.
Financial columnist Jane Bryant Quinn urged now is the time for reverse mortgage borrowers. Describing a savings strategy utilizing the Home Equity Conversion Mortgage Saver with its credit line option, Quinn advocates taking out the loan now, before program changes and while interest rates are low, and not withdrawing the borrowed amount upfront.
Written by Elizabeth Ecker