HECM Counseling

Arguably the most important consumer protection built into the reverse mortgage program is the requirement that the prospective borrower must first meet with an independent third party counselor approved by the U.S. Department of Housing and Urban Development (HUD) before signing a loan application or incurring any fees for the reverse mortgage. Each counselor is trained thoroughly and test to assist a senior interested in obtaining this product.

NRMLA states that by law, a couselor must review other options, with the senior, that are available including housing, social services, health and financial alternatives such as sale-leaseback financing or property tax deferral programs. They also need to inform the borrower of the tax consequences affecting eligibility under state or federal programs and the impact on the estate and their heirs.

HUD Proposes Program Changes

The U.S. Department of Housing and Urban Development will be issuing several mortgagee letters in the near future that make beneficial changes to the FHA reverse mortgage program, according to Meg Burns, Director of HUD's Single Family Program Development Division.

Addressing a luncheon crowd at the fifth annual Reverse Mortgage Day of Texas, held in Austin, on July 26, Burns noted the following program changes that HUD is in the final stages of reviewing:

A mortgagee letter to make counseling a borrower-paid expense disclosed on the HUD-1 form.
A mortgagee letter to extend the principal limit lock period from 60 days to 120 days
A mortgagee letter to eliminate an existing requirement that borrowers present a Photo ID.
HUD has already implemented a new policy whereby the department provides 10 days advance notice of any FHA loan limit increases. This, in turn, gives lenders an opportunity to obtain more funds for their clients.

Both Burns and FHA Commissioner Brian Montgomery are speaking at NRMLA's Annual Meeting & Expo in San Francisco, September 28-30. Attendees will have an opportunity to ask more detailed questions about the HECM program, and other FHA issues. To learn more about the Annual Meeting visit NRMLAOnline.org.

HECM volume Cap Removed

The Reverse Mortgage Advisor Volume 9.2, Summer 2006 reads "House Passes Legislation that Removes HEVM Volume Cap, Implements National Loan Limit". The the article states that the U.S. House of Representatives passed legislation, with a vote of 415-7, known as the Expanding American Homeownership Act of 2006 (H.R. 5121), which would make substantial improvements to the FHA HECM program. President Bush issued an immediate statement thanking the House and urged the Senate to pass its own version, S.3535.

This initiative, passed on July 25, would create a single national loan limit for the HECM program equal to the conforming Freddit Mac loan limit ($417,000 in 2006); establish a "home purchase" option tha would allow people to use a reverse mortgage to purchase newer housing that better suits their needs; and remove the volume cap on the numbe rof HECM loans that FHA can insure. read more...

Access Greater Amounts of Equity

Financial Freedom has Launched a new version of its "jumbo" product, called the Cash Account Advantage, as reported in the Reverse Mortgage Advisor Summer edition. This will enable them to be competitive with the federally insured Home Equity Conversion Mortgage by enabling homeowners living in properties valued between $450,000 and $750,000 to access greater amounts of equity. read more...

Reverse Mortgage Movie

Signing Pro has been featuring their Reverse Mortgage movie titled "What About Me" at NRMLA conferences for the past two years. The movie includes a narration with real life scenerios played by seniors ranging in age from 63 to 93.

Your potential clients will enjoy the story lines and relate easily to the characters, while at the same time assisting seniors in understanding the benefits of what a Reverse Mortgage can do to enhance their future. For a nominal fee Reverse Mortgage Loan Agents can embed their logo, photo and phone number into the story line.
To view the movie trailer visit our Reverse Mortgage Resource Center at www.signingpro.com.