Integrity in Property Valuation: The Introduction of Appraiser Independence In 2010, the Department of Housing and Urban Development (HUD) launched the "Appraiser Independence" initiative. This program was designed to protect appraisers from potential coercion by reverse mortgage lenders and borrowers, thereby preventing the inflation of property values that could affect market stability. Legislative Response to the Housing Bubble The impetus for this program was a widespread belief among lawmakers that undue influence on appraisers contributed to the housing bubble. By insulating appraisers f ..read more

In a landmark decision that's set to impact the reverse mortgage market significantly, the Federal Housing Administration (FHA) has announced an upward revision of the maximum claim amount for Home Equity Conversion Mortgages (HECM) in 2024. This change, which increases the limit from $1,089,300 to $1,149,825, will come into effect for case numbers assigned on or after January 1, 2024. The revision affects the mainland U.S. and extends to Freddie Mac’s special exception areas like Alaska, Hawaii, Guam, and the Virgin Islands. This move, as outlined in Mortgagee Letter ..read more

Today's seniors are sitting on an incredible amount of home equity: more than $11 trillion. For many, it's their largest asset. A HECM LOC lets older adult clients access that equity at a predictable growth rate, regardless of whether their home value increases or decreases. Borrowers with sufficient equity may have access to growth on their total credit facility. Here are two examples with and without a mortgage balance: Example 1: HECM line of credit growth with a mortgage balance Home Value: $550,000 Mortgage Balance: $100,000 Age: 65 Principal Limit: $207,900 ..read more

Many senior borrowers have been raised on the idea that a fixed rate reverse mortgage is the “only way to go”. Still others remember back to the early 80’s when interest rates climbed as high as 18%. Some borrowers experienced rising interest rates from adjustable-rate loans (or knew others who did) and some remember family and friends whose payments rose to a point where they could no longer afford their homes. A fixed rate locks the rate in for the life of the loan and the borrower does not have ..read more

The reverse mortgage lending limit for Home Equity Conversion Mortgages will surpass $1 million for the first time ever in 2023, under program adjustments set by the Department of Housing and Urban Development (HUD) that are updated annually. The lending limit for 2023 HECM loans insured by the Federal Housing Administration will be $1,089,300, an increase of more than $118,000 over the 2022 lending limit of $970,800. The HUD lending limit changes year over year to reflect the current housing market and average home price changes that take place in ..read more

There are a few things you need to do and although you do have some time, time is limited so you need to act without unnecessary delays.  The first thing you need to do is decide what you really want to do with the house. You can keep the home, sell it, or walk away and owe nothing regardless of the amount owed on the loan.  Obviously if there is equity still in the property it is to your or the estate’s benefit to keep or sell the property, but ..read more

Hi, I own my home in ABQ, NM. It is in a popular older neighborhood. I purchased the home about 3 years ago and paid cash. It was in total disrepair at the time and sold at a substantial discount as a result. The remodel was extensive, with most of the house stripped down to the frame, and completely rebuilt, including some of the framing, new roof structure, new electrical, plumbing, and everything. I modernized the floor plan, used the attic to make the ceilings vaulted, added a spacious ..read more

Like all loans, reverse mortgages come with some one-time costs and fees that all borrowers will face during the loan closing process, as well as some ongoing costs they will incur throughout the course of the loan. Many of the closing costs are the same as the costs that forward borrowers incur, such as recording fees. There are a few reverse mortgage-specific costs to be aware of, as well, in order to get a full picture of the costs associated with getting a reverse mortgage. In this article you ..read more

The reverse mortgage product is like other loans in many ways. A lender extends a loan to a qualified borrower, and in the case of a reverse mortgage, the borrower is then able to draw on loan proceeds based on a set of loan terms. Yet there are some specific rules that are particular to reverse mortgages. It’s important to explore these rules and to understand both the rules to qualify as well as the rules that all borrowers need to follow post-closing. In this article, you will ..read more

If you have a reverse mortgage (HECM) in place with a LESA, and you outlive the LESA, what happens? Alternatively, say the LESA was calculated estimating that you would live to a certain age and pay the taxes and insurance, and you outlived the funds available in the LESA, what would happen in that case? Hello Robert, These are great questions and ones to which all borrowers with LESA accounts should know the answers.  Firstly, if you pass and there are still funds that were set aside ..read more