20Jul
RMinfo: What are the changes quickly coming upon us? Jim: If any reader is sitting on the fence thinking about when is the right time to get a reverse mortgage, we believe the changes we will be seeing on October 1 will make that decision much easier but will require action right away. Right now ...
27Jun
RMinfo.com: Please tell us why you “stopped the presses”? Jim: Starting as of March 17, 2010, Security One Lending (S1L), Inc. announced that it dropped monthly servicing fee charges on all new fixed rate HECMs. The result is more cash upfront to borrowers. Currently this could make a difference of about $1,000 for the oldest ...
25Jun
RMinfo.com: Jim, can you please give a brief overview of the reverse mortgage program? Jim: My pleasure. First off, reverse mortgages present an excellent opportunity for homeowners over 62 to stop mortgage payments, obtain cash, and improve their quality of life. They can turn a portion of home equity into cash without monthly payments of ...
25Jun
RMinfo.com: Please tell us about reduced cost HECMs? Jim: Many lenders have recently announced that they are dropping monthly servicing fees on all new fixed rate HECMs. The result is more cash upfront to borrowers. Currently this could make a difference of about $1,000 for the oldest borrowers to about $5,400 for the youngest. (These ...
25Jun
RMinfo.com: What is the flurry of activity over HECMs about now? Jim: With no legislative mandate, late September 23, 2009, the Federal Housing Administration (FHA) posted Mortgage Letter 2009-34 notifying lenders that after September 30, 2009, FHA will not insure reverse mortgages unless principal limits (PL, i.e. gross maximum loan proceeds) offered to borrowers are ...
25Jun
RMinfo.com: Many people have heard the term nonrecourse used by the Federal Housing Administration (FHA) in regard to a loan. Jim, what does the FHA mean by nonrecourse? Jim: With nonrecourse loans, the borrower usually secures the amount due with specifically named property. If the borrower fails to repay the debt, the only thing that ...
25Jun
RMinfo.com: How and when does a HECM get paid back? Jim: A HECM does not become due and payable until the earliest of 1) the home is sold, 2) no borrower lives in the home as a principal residence, 2) all borrowers pass away, 3) the sole surviving borrower is out of the home for ...
25Jun
RMinfo.com: What are fixed rate reverse mortgages? Jim: In January 2007, one lender dramatically changed the reverse mortgage industry by introducing fixed rate reverse mortgages. Fixed rate reverse mortgages are basically the same as other reverse mortgages except that the interest rate used to compute available proceeds (called the principal limit) and monthly interest charges ...
25Jun
RMinfo.com: We heard great things from your recent industry convention, the National Reverse Mortgage Lending Association (NRMLA). Jim, please give us an update. Jim: Over time we have learned that there are those in this industry who only cover the advantages and avoid many of the things that concern borrowers the most. We spent a ...
25Jun
RMinfo.com: Jim, can you cite common misconceptions about reverse mortgages? Jim: Reverse mortgages are first and foremost, mortgages. Although this seems obvious, a recent article in the Wall Street Journal described a reverse mortgage as a sale of a large portion of the equity in a home to a bank; this is absolutely false. Another ...
