Top Reverse Mortgage News In 2008
December 23rd, 2008
- What Should Borrowers Expect From Lenders?
- Reverse Mortgage Loan Limits To Rise By More Than $365,000
- Amid The Financial Chaos, Is Now The Right Time For A Reverse Mortgage?
- Reverse Mortgage Top Ten — Should There Be 12? Or More?
- Annuities To Reverse Mortgage Borrowers Out Under FHA Reform
As we come to the end of 2008 what were the outstanding achievements in the world of reverse mortgages during the past year?
For the most part, reverse mortgages, FHA financing and VA loans have been the bright spots of the mortgage marketplace, forms of financing untainted by massive foreclosure levels, hidden fees, prepayment penalties and soaring rates.
Reverse mortgages have done particularly well during the past year because for more than 100,000 borrowers they have represented a reasonable trade of cash for equity. No less important, because of changes made to the HUD-backed HECM program, it looks as though reverse mortgages will be a better product in 2009.
There were several major reverse mortgage achievements in 2008 and most benefited borrowers. In no particular order, here are what I see as 2008’s winners.
___ The loan limit for FHA-insured reverse mortgages was increased to $417,000 for a single-family home in the lower 48 states. The higher-allowable amount will make reverse mortgages more attractive in high-cost areas such as California, New York, Massachusetts and the Washington, DC area.
___ Congress passed H.R. 3221: The Housing and Economic Recovery Act of 2008. This FHA reform bill included important borrower protections which prohibit the sale of annuities and other financial products by those who also sell reverse mortgages.
___ Lenders originated 112,154 FHA-insured reverse mortgages in fiscal 2008, a record.
___ A new, better and cheaper origination fee system for HECMs was established.
___ Some senior homeowners were able to prevent foreclosures and lower monthly living costs by getting a reverse mortgage.
___ Congress banned lender-funded reverse mortgage counselors. As a result, HUD allocated $50 million to pay for such information and advice.
___ Reverse Mortgage Person of the Year: Has to be Senator Claire McCaskill (D-MO), the lawmaker who eliminated the ability of reverse mortgage originators to also sell annuities. Many reverse mortgage originators had such rules in place and with McCaskill’s help there is now a nationwide standard which says what’s allowed — and what isn’t.
Lastly, and with some modesty, 2008 was a very good year for BestReverseMortgage.com. Just for fun you might want to compare our Alexa traffic numbers with any other reverse mortgage resource online — just remember the Alexa rankings are like golf, the lower your number the better you’re doing.
And for all who read this blog, to you we wish all the best for 2009.