Last week Financial Freedom announced some changes to their Cash Account program. According to the announcement that was forwarded on to me, the adjustments are due to the ongoing disruption that the credit markets are experiencing. The changes include the following:
- Maximum Principal Limit must not exceed $2 Million
- Maximum LTV must has been lowered
- Manufactured homes are ineligible
- UPB Premium is eliminated
The changes also include a 6% principal limit reduction for properties within a zip code that is deemed a declining market. The areas that FF has listed as declining markets are mostly in California, Florida, and Michigan but a few other states have certain areas that will be affected too.
I cant say I’m really surprised by the announcement because I’ve been hearing most reverse mortgage lenders are becoming tough on jumbo appraisals. A handful of forward lenders have already made announcements like this so I wouldn’t be shocked if a few other reverse lenders did the same too.