There’s just about a week to go before new reverse mortgage principal limit factors and insurance premium rates go into effect, and the industry is currently scrambling toward the finish line. If you’ve been too busy to catch up on the rest of the news from the world of Home Equity Conversion Mortgages, check out our weekly roundup of must-read stories from the last seven days.
New Regulations Raise Questions About Reverse Mortgages and MMI Fund — When rolling out the more restrictive principal limits, the Department of Housing and Urban Development cited the HECM’s drain on the Mutual Mortgage Insurance Fund. But some experts — including President Trump’s pick for Federal Housing Administration commissioner — believe that including reverse mortgages with the rest of the loans in the fund muddies the picture of both products.
Reverse Mortgage Giant AAG Planning to Launch Forward Division — American Advisors Group placed a job listing for forward mortgage professionals ahead of a planned October roll-out. The great leap forward marks another potential expansion for the industry leader, which also recently launched a residential real estate brokerage firm.
What HUD’s New Rules Mean for the Reverse Mortgage Industry — Bookmark this link as a quick reference on the changes coming to the reverse mortgage space, from the disappearance of the principal limit factor “floor” to the ins and outs of the new mortgage insurance premiums.
Could Residential Sale Leaseback Compete with Reverse Mortgages? — One startup thinks it can come after the HECM with an idea from the world of commercial real estate: sale-leasebacks, in which homeowners sell their properties to an owner who then becomes their landlord. The firm, EasyKnock, says the commission and rent costs end up being comparable to HECM fees, but the homeowner can unlock significantly more home equity.
How Elder Law Attorneys Can Become Key Reverse Mortgage Partners — Elder law attorneys can provide connections to older Americans who might need to tap into their home equity — but educating partners about the product is also key to success.
Around the web
Writing in Forbes, longtime HECM proponent Jamie Hopkins characterizes the hand-wringing over the new reverse mortgage rules “an initial overreaction,” noting some potential benefits. For example, as reverse mortgage lenders increasingly compete on rates in the absence of the principal limit factor “floor,” consumers could end up saving money in the long run. Hopkins, a professor at the the American College of Financial Services in Bryn Mawr, Pa., also posits that the slowdown in the growth of HECM credit lines will help bolster the program going forward.
“This is a welcome change for the program because reasonable line-of-credit growth limits are needed to prevent the program from insuring unreasonable amounts in the future,” Hopkins wrote.
Read Hopkins’ full take at Forbes.
Written by Alex Spanko