Reverse Mortgage Guide

In the first two weeks of September, HUD reports that 3,536 FHA reverse mortgages were issued.

So far in fiscal 2007 the FHA has originated 103,431 HECMs, a number far above the 76,000 originally projected for the full year. This is more than 20% of all the FHA loans issued during the year.

What accounts for great popularity of FHA reverse mortgages? Most probably several factors are involved:

First, the FHA reverse mortgage program is insured by the federal government. That gives it its status which is simply unavailable to private-sector programs.

Second, HECMs are a known product without surprises or “gotcha clauses.”

Third, more lenders are going into the reverse mortgage marketplace. This makes sense when you consider what’s happening with other sectors of the mortgage arena.

Fourth, it is likely that some number of the FHA reverse mortgage origination’s came about because borrowers had toxic loans that they wanted to replace. If you think about it, what could be better than replacing an awful loan with financing that requires no income qualifications and no need to repay on a monthly basis.

This entry was posted on Wednesday, October 3rd, 2007 at 5:46 am and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.