Category Archives: HECM

Senate Passes FHA Reform

The The Expanding American Homeownership Act FHA Reform bill passed was Friday by the full US Senate.

The bill passed 93-1 and cuts in half the required down payment for FHA first time homeowner programs.

This bill Expands the FHA Home Equity Conversion Mortgage (HECM) Program maximum loan limit to a national level of $417,000 the current Fannie Mae loan limit, and lowers origination fees from 2% to 1.5%

While the bill has some process to go through before it becomes law, it may become law shortly before or after the new year.

FHA

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The FHA Bill could be passed within the next eight weeks.

The FHA Bill could be passed within the next eight weeks.


How the Reverse Mortgage Credit line works

A reverse mortgage pays off current liens on a seniors home, and other equity that is left over is available to the senior in the form of a credit line.

The equity that is available in a credit line grows each year. The growth for the FHA reverse mortgages is half a percent higher than the current rate for the loan. So if the rate of the loan is 4.75%, the growth-rate of the credit line is 5.25%.

Because of this, a higher rate loan might be more appealing to a senior with a large initial credit-line. The difference in growth over the life of the loan is something to seriously consider.

Credit lines can be used for anything, and the money is tax free.


Bank of New York is now EverBank

Back in March 2007, Bank of New York Co. had relinquished its 49 percent stake in reverse mortgage lender BNY Mortgage Co. to majority partner EverBank Financial Corp. As Everbank is a privately held company, this transaction took place for an undisclosed price.

In Early November 2007, Bank of New York officially started doing business as Everbank. EverBank is based in Jacksonville, Florida


Reverse Mortgage – When home repairs are necessary

Occasionally a real estate appraiser will notice that some repairs or further inspections are necessary, such as a foundation, electrical, or roof inspection.  When further inspection requires repairs, the loan will fund, and one and a half times the amount of the repair estimate(s) will be withheld until those repairs are made.

After the repairs are made, and certified as complete by the repair inspector, the bank will issue a check directly to the repair company.


FHA lifts the cap off of senior reverse mortgages

The US senate made a decision to end the limit of FHA reverse mortgages. The limit was 250,000 per year, and earlier this year that limit had been extended.

Many seniors are eagerly awaiting loan limit increases. Presently the highest FHA loan limits in Washington State range from $200,160 to $362,790 in higher priced counties. The senate plans on meeting about increasing the fha loan limits soon.


The better reverse mortgage deal.

Some lenders have recently pulled the HECM 100 program until further notice.  Most recently Financial Freedom has phased out thier HECM 100 and HECM advantage programs.  Financial Freedom will continue to offer the HECM 150 program.

What this means to most borrowers is that for the time being, some lenders have access to a better rate, and an overall better deal in reverse mortgage. 

For example, with the HECM 100 program, an 82 year old borrower with a $200,000 loan value would currently qualify for $145,000 to pay off thier current mortgage and toward available cash.  However with the HECM 150, that same borrower would qualify for only $139,000. 

The difference is mostly due to the higher interest rate calculation for the HECM 150.

Since my company, Stay in Home, is a power-broker in the reverse mortgage industry, count on us to continue to offer the best deal in reverse mortgage.