Hello Yvonne, I am sorry to hear this. I don't know which lender you are referring to because there are different ways to determine "size" and third largest alone doesn't tell me with whom you dealt. It could be the third largest current producer, they might have the third largest portfolio of reverse mortgages, or possibly they might produce the third highest volume of a particular segment of loans and could still be accurate, so I don't want to make any assumptions about the company. Not knowing which company, it is, I have no reason to try to defend or condemn them, but I can tell you this, all jumbo reverse mortgage investors (those who buy the product from reverse mortgage lenders to sell in the secondary markets) began notifying lenders of a drastic reduction in sales of the loans and an immediate need to raise rates and revamp program parameters in May. No lenders were exempt from the pressures put on the market from the unchecked inflation and the two rate hikes the Fed had already implemented with rumors that there would be a third coming that could be as much as .75% to 1.00% in a single increase. The market panicked. Any borrower who was not already at loan documents with a rate locked was suddenly subject to rapid fluctuations along with interest rate and program changes, especially toward the end of May. Interest rates have been climbing ever since with just a few weeks of respite where the market calms down but during those weeks, the improvements have been small. With the HECM loan, your expected rate is locked for 120 as of application and if it is lower on the date the lender draws documents for closing, you get the lower rate (which means more money for you if you are above the floor rate of 3% which almost all loans are at this point). Some jumbo programs have been more affected than others but there have been none that were spared the negative impact foisted upon the programs by the rapid rate increases and the uncertainty in the market. HUD sets the requirements for properties that have individual and non-public water supply systems (such as wells, springs, lakes rivers, artesian wells, cisterns, etc.). As with many other property situations, most of the time, lenders are not even aware of the existence of many issues until they receive an appraisal or title report. If the lender had an appraisal telling them the water for your property was supplied by spring months ago, they should have requested the report on the quality of the water at that time. If they were only made aware of the existence of the water supply recently, they may not even have known to make this comment to you early on. There is no way to tell borrowers about all possible situations that may create a problem in advance in all circumstances. Again, I am not defending your lender because if they had this information earlier, they should have let you know but if they didn't, they could not have known. We sometimes see things in appraisals we cannot anticipate that render properties ineligible for HUD insurance that are not common, and we do not anticipate. Sometimes we discover that the property is within so many feet of a gas tank (even though it is not on our borrower's property and across the street). There are power lines that extend across the back yard and over a swimming pool. The property is serviced by a well that does not pass testing. The property is not hooked up to a sewer even though there is a sewer line available. Through no fault of the borrower, the zoning has changed, and the property no longer conforms to zoning laws and could not be rebuilt should it be substantially destroyed. All these conditions are not issues that a lender can know until substantial investigation has been performed and the existence of the condition appears on a report the lender receives during the loan origination. HUD does not disallow properties that utilize spring water, but they do require the water to be of a certain quality or they will not insure the loan (which means that the property would not be eligible for a reverse mortgage). Perhaps there is a way to address the issue of the contamination to determine if the test was correct or if there is any way to resolve that issue? I am not an engineer nor am I familiar with e coli so I cannot help you with that aspect of your situation, but have you checked with any other testing/treatment facilities? I don't know how the water is delivered from the springs to your home so is there a possibility that there is an issue in the method of delivery? As I said, I don't know the answers to either of these questions in your case, but it might be much easier and less expensive in the long run to find out and who knows, you might just be able to get the loan you are requesting if you can solve the issue (not to mention protect your health in the process).

Hi Kathy, There are many proprietary programs available. The rates are usually much higher though so you may not pay as much in closing costs but the annual interest may add up quickly so it would be wise to compare both options.

Hi Richard, I do not know how aggressive they got with the pricing so that may be true, but it may not be. I would suggest that you contact us and let us look at your circumstances. It will not cost you a dime and we can go through the numbers with you and see if we can do better. If we can get you there with no money out of your pocket at closing, it might make all the difference. Our toll-free number is (800) 565-1722. All you need to do is ask for a licensed loan officer in your state and we will do the rest!