Written By: Kristen Curzytek
August 9, 2013 – President Obama signed the Reverse Mortgage Stabilization Act into law which will grant the Department of Housing and Urban Development (HUD) the ability to move forward with reverse mortgage program reform.
The Reverse Mortgage Stabilization Act will give the Secretary of HUD the authority to add some additional requirements to the reverse mortgage program. It already has many regulations to safeguard borrowers of the Home Equity Conversion Mortgage (HECM) program.
HUD will also be able to make changes to the program much quicker and help limit the losses that the program has seen which have recently been discovered in an FHA insurance fund audit in 2012. These changes will help protect borrowers from falling behind in tax and insurance payments and also protect spouses who were not included in the reverse mortgage loan.
Recently, HUD has been working with the National Reverse Mortgage Lenders Association (NRMLA) to make changes to the program that will help protect borrowers and at the same time bring stability to the Federal Housing Administration’s (FHA) insurance fund for the reverse mortgage program. With this act now in place, HUD will have the ability to make the necessary changes to the program.
The changes that could come to the reverse mortgage program are still being discussed in Washington and may include:
– Mandatory escrow accounts to pay for tax and insurance payments
– Financial assessment of borrowers
– Restrictions in upfront draw amounts
– Mandatory inclusion of all spouses on the reverse mortgage loan
At this time, no additional restrictions have been put in place but changes mentioned above may come as soon as October 1.
Overall, the Reverse Mortgage Stabilization Act will help protect borrowers through the life of the reverse mortgage loan.
Here at One Reverse Mortgage our licensed experts specialize in providing education to our clients about the reverse mortgage program.
These changes to the reverse mortgage program are COMING SOON and can affect the amount you will qualify for. The process at One Reverse Mortgage is safe, secure and easy, plus your licensed expert will be with you every step. If you are interested in the program, DO NOT DELAY, these changes may come as soon as October 1.