These last two weeks have been extremely stressful and hectic for me because I was trying to beat the deadline before FHA reduced the funds on Reverse loans by 10%. This new ruling was to become effective on October 1st. and unless a client had completed their HUD mandated counseling and a loan application prior to that date, they were not going to receive the money that they thought they would be getting.
I think a number of us were taken by surprise by this less than encouraging news and I had to put a lot of pressure on four of my clients to hurry up and complete the counseling so that I could order a HUD case number before the deadline. Amazingly, I managed to do this but I’m sure that there are many seniors who were unable to move fast enough or get a counseling appointment. And now its too late.
The agencies were backed up with the demands and without a counseling certificate, you can’t get a HUD case number, so it was crucial to get the counseling done immediately! The last two weeks have been insane for me, as I pushed and pushed to get these four loans assigned their Case numbers before it was too late.
Those who were still undecided about the loan, will now have to settle for less money and if they currently have a large mortgage that needs to be paid off, they may find themselves unable to do so. This is particularly tragic and especially considering the difficulties seniors are confronting in our current economy.
An interesting note here, is that the Department of Housing and Urban Development ended up issuing 60,000 case numbers within the last few days. Not all of these are necessarily for Reverse loans but in my mind, that’s a huge number and means that 60,000 people are doing an FHA loan of some sort.
I’m going to add here a bit of additional information that is important for a senior to be aware of. Currently the HUD lending limit for Reverse loans is at $625,500 throughout the United States. But there is an ongoing discussion to reduce that figure after the first of the year, to what it was previously, $417,000 which is not good news.
If you have been trying to decide whether or not to do the loan, you had better quit procrastinating, do the free counseling through Money Management and then make a decision. If the lending limit is reduced, you may find yourself in a helpless situation and wishing that you have done a Reverse loan instead of just “thinking about it.”