Friday Round-Up: Life After Oct. 2, H4P Changes

All of us here at RMD hope you’ve had a chance to catch your breath in the wake of principal limit factor changes on October 2. In case you’ve still been working through an overfilled pipeline of loans and phone calls, here’s a quick roundup of the other headlines you may have missed from the week in reverse mortgages.

Reverse Mortgage Originators Wake Up to a Post-October 2 World — RMD reached out to originators throughout the country to get a post-mortem on the September scramble, with some reporting that they worked into the wee hours of the morning to help finalize applications ahead of the October 1 case-number deadline. The main takeaways: Demand rose as sharply as everyone expected, and the Home Equity Conversion Mortgage counselors of America deserve a pat on the back.

Researchers Look into Reverse Mortgage Crystal Ball — RMD asked two of the most prominent reverse mortgage researchers, Jamie Hopkins and Wade Pfau, for their takes on how the new PLFs and mortgage insurance premiums will affect the industry going forward. Hopkins asserted that most consumers won’t care about the changes — after all, many of them weren’t tapping the line completely even under the old rules.


FHA Relaxes H4P Certificate of Occupancy Requirement — In a surprise move announced during the heat of the PLF race, the Federal Housing Administration made a long-awaited change to its HECM for Purchase requirements: Consumers will now be able to apply for the loan even before the certificate of occupancy is issued for new construction. 

Reverse Mortgage Credit Line Strategy May Benefit More Retirees — While the researchers didn’t use the new principal limit factors in their analysis, Pfau and Barry and Stephen Sacks probed the ways that a HECM line of credit could benefit a variety of retirees, including those with lower retirement savings and home values than previous studies considered.

Reverse Mortgage Counseling Demand Rose 62% in September — Recently released data from Ibis Software Corporation’s counseling program show that demand rose about as much as the industry expected last month, though the surge tapered off slightly after September 22 — the deadline for California borrowers who needed to wait seven days before applying under the state’s “cooling-off” law.

Written by Alex Spanko

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