HUD is planning several changes to the federally insured Reverse mortgage program, otherwise known at the HECM. The anticipated date for some of the initial changes will go into effect in October, but until there is an Mortgagee Letter released outlining all of the changes, it is not clear as to just exactly what these will be and how they could effect a senior applying for the loan.
However, if you or someone you know has been thinking about the possibility of using the loan, I would not hesitate to meet with someone that can provide you will correct information, so that you can make an educated and informed decision as to whether or not this would be of value to you or your parent(s).
As the pending changes become apparent and the details are released to the general public, there will be most likely a rush on the HUD approved counseling agencies to set up the required counseling appointment as part of the application process for a Reverse loan. And if that should happen, it could take several weeks before one might be able to book the appointment and not meet the deadline before the changes to the loan program go into effect.
I will share the following article in two parts.
HUD to Combine Existing Reverse Mortgage Products
Posted By Elizabeth Ecker On August 19, 2013 @ 5:30 pm In Reverse Mortgage | 11 Comments
“The reverse mortgage industry and the Department of Housing and Urban Development are beginning to shed light on the changes that are in store for the Home Equity Conversion Mortgage program following approval for program change granted  by Congress this month.
HUD Deputy Assistant Secretary Charles Coulter explained the proposed changes, without providing full details which are still being worked on at HUD, in a recent conference call with the National Reverse Mortgage Lenders Association’s executive and policy committees.
HUD is planning to create a new reverse mortgage loan program, while discontinuing the two programs—the Standard and Saver—as they are currently offered, according those familiar with the details. The new loan will come with new principal limit factors that range somewhere between the current Saver and Standard programs, though details have not yet been released on exactly where on the scale the new PLFs will fall.”
Part (2) to Follow