Following the announcement this week by the Department of Housing and Urban Development as to the changes it is implementing to its reverse mortgage program, the Chicago Tribune picked up on the story to outline the impact in an article titled: “HUD tightens reverse mortgage rules in bid to shield seniors.”
“In recent years, the age of borrowers taking out the loans edged downward and more chose to receive a lump-sum payment, worrying consumer advocates that homeowners would burn through the proceeds,” the Tribune writes. “The Consumer Financial Protection Bureau highlighted its concerns about the program a year ago in a 231-page report.”
Outlining the changes, which include a restriction to 60% of the principal limit allowed to be taking at closing or enough to cover mandatory obligations plus 10% of the principal limit—whichever is greater—and different mortgage insurance premiums depending on the amount borrowed, the article recaps the major adjustments.
Further, the Tribune notes an upcoming financial assessment of borrowers and mandatory tax and insurance set asides that will go into effect in January 2014.
Written by Elizabeth Ecker