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60% Reverse Mortgage Disbursement Rule Explained

September 8, 2021     4 comments

The U.S. Department of Housing and Urban Development has made several changes to the Home Equity Conversion Mortgage (HECM) program to strengthen the FHA Mutual Mortgage Insurance Fund (MMI or Fund) and protect the viability of the reverse mortgage program. The changes affect the following requirements: Initial disbursement limits New Single Disbursement Lump Sum payment option Initial mortgage insurance premiums Initial mortgage insurance premium calculation for refinance transactions New Principal Limit factors Financial assessment requirements Funding requirements for paying property charges are based on the financial assessment. Lump... Read Full Article

Reverse Mortgage Credit: Tax Lien, Judgement & Collections

September 8, 2021     36 comments

How Credit History Can Affect Your Reverse Mortgage Eligibility  Court judgments and outstanding state or federal tax liens can blemish your credit history and make borrowing difficult.  These derogatory marks on your credit report can also hinder your ability to get a reverse mortgage. A reverse mortgage allows homeowners age 62 and older to borrow against their home equity, which they may receive as a line of credit in a lump sum or monthly loan disbursements.  The loan is generally repaid when the borrower passes away or permanently vacates... Read Full Article

New Appraised Value Under 12 Months? No Problem!

September 7, 2021     no comments

We bought our home 11 months ago. According to what I understand the loan must be more than 12 or older. We will need to wait a few months to do a reverse mortgage? Hi Lowell, You and I also traded emails on this issue but I thought this was a good opportunity to let the community see the answer as well.  There is no requirement to refinance into a new reverse mortgage loan of one year seasoning on a house that you acquired on a bona fide sale. If... Read Full Article

Reverse Mortgage Commercials: The Impact of High-Pressure Sales

September 7, 2021     no comments

I usually write articles based on the current situation in our industry or the feedback I'm getting from customers.  It seems that now more than ever, I'm getting online blog requests and calls from borrowers telling me they are feeling a lot of sales pressure from loan originators on their reverse mortgage requests. Some of these folks are quite concerned because the lender representative will call constantly and quote everything from company size to monthly volume as a reason for doing the loan with them but not necessarily tangible benefits... Read Full Article

Successor of my Parent’s Living Trust with a Reverse Mortgage

September 3, 2021     2 comments

First off, I absolutely LOVE this site! So informative as it relates to reverse mortgages. Thank you for helping us navigate this reverse mortgage world. My parents had a RM. Mom passed away last year; dad this past June. They had a Living Trust and will. Their house was in the Trust with instructions to sell it and distribute assets to my siblings and me, and their church based on percentages. One of my siblings wants to purchase the house. The lender appraised value is $450k. The realtor comps show... Read Full Article

Was my Mother’s Reverse Mortgage Illegal?

September 2, 2021     8 comments

My mother and I were listed as Trustees on the Deed and title of the home she was living in.  I was named executor of her irrevocable trust.  The house was paid in full, but she had an equity loan and medical bills for approximately $27,000.  She told me she wanted to take out a Reverse Mortgage to pay for the equity loan and medical bills.  I advised her of other options besides the reverse mortgage, and she said she would do it anyway.  She qualified for the reverse mortgage... Read Full Article

How Financial Assessment Made Reverse Mortgages Safer

August 31, 2021     no comments

This financial assessment process is conducive to making the Home Equity Conversion Mortgage (HECM) an even safer loan product. If a potential borrower can swallow such an absurdity he need not be concerned about who this financial assessment (FA) is making the product safer for! The FHA wants .50% insurance and will only allow 60% loan to value and now wants additional insurance to secure the loan. What are sheep for if not to be sheared? I understand the skepticism and sentiment and I would wager that with the... Read Full Article

3 Options if You Married Someone with a Reverse Mortgage

August 31, 2021     25 comments

My fiance (age 68) has a reverse mortgage on his home. I believe it was signed in 2017. We live in WA state and have a de facto marriage 9 years now but are going to legally marry this year. What rights do I have to stay in the home should he die? I am 61. You have two different issues and I can only really address one. The first is the title.  If you are not on title to the property and something happens to your spouse,... Read Full Article

10 Tips for Using a Reverse Mortgage for Home Purchase

August 30, 2021     2 comments

Are you planning to use a Reverse Mortgage Purchase?  The following tips will be handy... The sale must be an “Arm’s Length Transaction, " meaning you must buy from a totally unrelated third party.  Purchases involving family members are not eligible. Has the property recently sold?  The property cannot have been sold less than 6 months prior to this sale, as that would be “property flipping.”  HUD does allow for some exceptions for HUD repos.  Check with us BEFORE you make an offer. You will need to be able... Read Full Article

You Keep Ownership with a Reverse Mortgage, Not the Bank!

August 30, 2021     14 comments

With a reverse mortgage, am I applying for both a loan and a line of credit?  Where does the possibility of any cash equity affect me? I had been told this would be a simple transfer of my home to the company, with no further mortgage payments from me for the rest of my life.  Upon my passing, the bank will own my home.  Am I too simple and naive in my understanding and explanation? I remain interested and confused. -Don C. Reverse mortgages are nothing but a loan... Read Full Article