Friday Round-Up: Reverse Mortgages’ Bad Rep, Quicken Considers FHA Exit

In case you missed it, here’s what happened in reverse mortgage news this week:

Quicken Loans Considers Quitting FHA Lending Over DOJ Dispute—In a Reuters report this week, the third biggest mortgage lender in the U.S. said it is considering backing away from Federal Housing Administration (FHA) lending programs, citing an ongoing legal dispute with the Department of Justice over false claim allegations made earlier this year.

HUD Watchdog Sees Increase in Appraisal Fraud for Reverse Mortgages—The Department of Housing and Urban Development’s Office of Inspector General (HUD-OIG) issued a bulletin this week to warn reverse mortgage lenders and other industry stakeholders of potential appraisal fraud as it applies to refinancing Home Equity Conversion Mortgages (HECMs).

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Should FHA Exclude Reverse Mortgages from the MMI Fund?—Last month, the Federal Housing Administration (FHA) revealed a $19 billion gain to the economic value of its Mutual Mortgage Insurance (MMI) fund in Fiscal Year 2015, driven in part by a nearly $8 billion growth in the reverse mortgage book of business. While this performance signaled a welcoming improvement for the MMI fund, a new report suggests that FHA is misleading in the way it calculates its financial status.

WSJ: Reverse Mortgages Have an Undeserved Bad Reputation—The assumption that reverse mortgages should only be used as a last ditch effort to bolster funds, rather than a financial planning tool, has long hindered their effective use in helping retirees finance longevity. But considering the string of recent policy updates over the past few years and wealth of reverse mortgage research, one financial planner says it is time to lay those long-held misperceptions to rest.

Program Changes Behind, Reverse Mortgage Industry Finds Solid Ground to Grow—Many of the policies that have earned reverse mortgages harsh criticism and negative press in the past have since been corrected, ushering in a new era for the industry. But while this new environment may facilitate some new growth opportunities for lenders, many of the same challenges remain.

Written by Jason Oliva

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