The Department of Housing and Urban Development made a major announcement about the health of the federally backed reverse mortgage program, and the industry convened in San Francisco for its flagship annual convention.
It was a busy week in the world of Home Equity Conversion Mortgages, so check out RMD’s handy all-in-one guide to the biggest headlines:
[Update] FHA Reverse Mortgage Insurance Fund Value Falls — HUD and the Federal Housing Administration dropped the annual actuarial report on the Mutual Mortgage Insurance Fund, and the results were grim: The HECM program had a negative economic value of about $14 billion, dragging down the overall health of the combined forward and reverse pot. The following day, HUD officials placed the blame for an across-the-board drop in capital ratio squarely on the reverse program — and said the results justified the decision to lower principal limit factors and change mortgage insurance premiums.
HUD Officials Assert Carson’s Dedication to Reverse Mortgages — Speaking to a crowd at the National Reverse Mortgage Lenders Association’s annual conference, HUD officials emphasized secretary Ben Carson’s desire to support the reverse mortgage program going forward, while also announcing a delay in long-proposed updates to the Single Family Housing Policy Handbook 4000.1.
Reverse Mortgage Changes Bring Rate Competition, Program Stability — RMD spoke with brokers and originators across the country for their takes on the updated PLFs; as predicted, many foresee increased competition on interest rates, along with changes to the target demographics and marketing plans. However, there was some agreement that the changes will help put the program on a more stable footing in the future.
All Reverse Mortgage Rolls Out New Comparison Tool — Partially inspired by the new principal limit factors and the rise in rate competition, All Reverse Mortgage introduced the All Reverse Loan Optimizer, a tool that allows borrowers to compare a variety of products with different rates and origination fees.
Ginnie Mae Official Issues Warning About HECM-to-HECM Refinances — Also at the conference, a top Ginnie Mae official warned reverse mortgage professionals not to be tempted to facilitate questionable HECM-to-HECM refinances amid new principal limit factors — or face swift action, which the corporation is already taking on the Veterans Affairs lending community.
Written by Alex Spanko