HECM Loan Limits Not Helping Enough?
Filed under FHA news, Published Articles · Tagged: FHA loan, HECM
While the 4.3% growth in home equity conversion loan volume isn’t close to what the industry has seen previously, with loan limits raised and fees capped at $6,000 people are expecting a surge of FHA loan applications. “One reason for the lower reverse mortgage volume was the uncertainty over the FHA loan limits,” said Peter Bell, president of NRMLA, the nonprofit trade group based in Washington, D.C. “There were so many people waiting on the sidelines to see what would happen. Why would you want to close a loan a few weeks ago when you could borrow less and get a higher mortgage rate?”
Watch Reverse Mortgage Video
FHA offers home equity conversion mortgages to qualified seniors who are at least 62 years old.
Reverse mortgages are SAFE and at a 2.9% Jan. 2009 interest rate. Why not?
While the industry has seen the HECM loan limits increase to $417,000, Kelly suggests that mortgage lenders vow to push vigorously to lift the ceiling to $625,500 as soon as possible, especially given the exit of all jumbo reverse mortgage products. Raising the FHA loan limits to $417K helps people in certain areas of the country, but in places like California the new mortgage loan limits don’t provide much more benefit.
An interesting part of the from the story is about FHA Commissioner Brian Montgomery’s mother and reverse mortgages, which Kelly describes below: Commissioner Brian Montgomery, who will leave his post when the current administration exits in January, said there is a bright future ahead for reverse mortgage loans, despite the current credit crunch. He has tried to convince his mother to take out a reverse, but she, like many seniors, has been suspicious of the concept. “I told her that I was her son and would always be looking out for her best interests,” Montgomery said. “I also told her that I administered the program for the United States of America and thought it was a pretty good idea.” FHA mortgage lending continues to evolve rapidly, so check back for the latest news and updates.
