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Reverse Mortgage Age Limits & Title Cautions

June 29, 2021     48 comments

The HUD HECM program limits the youngest borrower to the age of 62 or older to be eligible for the reverse mortgage program. If there is a spouse of a borrower who is not yet 62, the older spouse can still get a reverse mortgage and the younger spouse can remain on title and would be known as an “eligible non-borrowing spouse.” Eligible Non-Borrowing Spouses An eligible non-borrowing spouse can also live in the home for life, even if the older spouse passes or should have to leave the... Read Full Article

Reverse Mortgage Payment Options: Lump Sum vs Line of Credit

June 29, 2021     12 comments

If I do a reverse mortgage, can I pull all the money upfront as a lump sum, or do I have to have a line of credit? Is there a cost to pulling out all the money upfront? HUD changed the program a little while back so that borrowers are capped at what they can pull from home based on the amount of what HUD calls the property charges that must be paid at the time of the loan. The bottom line is that borrowers who need all... Read Full Article

BREAKING: HUD Just Issued Deferral for Non-Borrowing Spouses

May 6, 2021     16 comments

BREAKING NEWS: With Mortgagee Letter 2021-11 (ML 2021-11), HUD just clarified to reverse mortgage borrowers who obtained reverse mortgages when one spouse was not on the loan and was considered a non-borrowing spouse. Prior to 2014 when HUD changed the rules, these spouses had no protections under the loan, and after the 2014 changes, the “eligible non-borrowing spouse” designation came about with certain restrictions.  The announcement helps borrowers who obtained their loans before and after the 2014 rule changes. Before 2014, non-borrowing spouses had no protection under... Read Full Article

When is the Best Time to Take a Reverse Mortgage?

March 14, 2021     4 comments

Ultimately the right time to get a reverse mortgage depends on what works out best for the borrower. The timing must be right for you and your needs.  But we hear borrowers who are convinced that they want the loan but are thinking that they should wait a year or two until one of the borrowers is older so they can get more money from the loan. We believe this is the wrong strategy and we will explain why in this article. This can lead to borrowers paying higher rates... Read Full Article

Who is borrower when trust is involved? Trustee, Trustor or Beneficiary?

January 22, 2021     2 comments

We just received a great question from one of our readers: Hey ARLO! Thanks for being around to help so many looking for opinions on Reverse Mortgage questions. I am the Trustee of a revocable trust where my Mother-in-Law is the Trustor & Beneficiary. I thought I was close to signing a reverse mortgage with a Lender. Now the Loan underwriter/lender is having issue with Trustor of Trust as she is unable to take care of her finances. This phrase is included in a letter, requested by lender, from the... Read Full Article

Reverse Mortgage Treasury (CMT) as Transitions to SOFR

October 12, 2020     2 comments

Overview With GNMA's recent announcement, HECM ARMs using LIBOR as their index will soon not be viable to originate. While LIBOR has been destined to be phased out for some time, this unexpected announcement will require a faster transition than was expected. The framework around SOFR, the anticipated replacement to LIBOR, has not been fully developed yet, and as such adjustable-rate HECM loans will need to use CMT (Constant Maturity Treasury)– at least in the short term. This will be a back-to-the-future for the reverse mortgage industry. CMT-based HECM products were... Read Full Article

What COVID-19 Means For Reverse Mortgages

April 1, 2020     22 comments

2022 UPDATE: FHA Clarifies COVID-Relief Options for Borrowers The Federal Housing Administration published a technical update to Mortgagee Letter 2021-15 that will provide additional time for borrowers economically impacted by the COVID-19 pandemic to seek relief. Details were provided this week in Mortgagee Letter (ML) 2022-02. ML 2022-02 clarifies that the first legal deadline and Reasonable Diligence Time Frame are extended by 180 days from the later of either: the expiration of the foreclosure moratorium for FHA-insured Single Family Mortgages; or the expiration of the borrower’s COVID-19 forbearance or Home Equity Conversion Mortgage... Read Full Article

2020 Reverse Mortgage Changes: New Limits, New Programs!

December 13, 2019     10 comments

What’s New and Exciting for 2020 Reverse Mortgages? It seems that reverse mortgage borrowers have been getting nothing but bad news for the past 7 years. HUD has implemented more restrictions, lowered amounts available to borrowers, increased eligibility requirements that borrowers had to meet and overall, reverse mortgage borrowers have had little to be happy about for a while. Don’t get us wrong, it hasn’t been all bad news.  Over that same period, properties began to rise in value again after 2012 giving borrowers more equity, jumbo & proprietary programs... Read Full Article

2020 Reverse Mortgage Limits Officially $765,600

December 4, 2019     2 comments

BREAKING: 2023 Reverse Mortgage Limits Reach All-Time High $1,089,300! HUD just announced that the current reverse mortgage loan limit for the HUD Home Equity Conversion Mortgage (HECM) will be raised from $726,525 to $765,600 effective January 1, 2020.  The HUD Mortgagee Letter announcing the increase, can be found on the HUD website here: https://www.hud.gov/sites/dfiles/OCHCO/documents/19-20hsgml.pdf . After the limits remained unchanged for many years, this is the 4th year in a row where HUD has raised the lending limit.  It had remained stagnant at $625,500 since 2009 when the limits... Read Full Article

Reverse Mortgages: Remaining Principal Limit After 12 Months

November 16, 2019     4 comments

My father recently passed away and left his duplex to my brother and I, It is paid for and all taxes are current. I have lived in one side for over 25 years and my brother lives 100 miles away. I would love to keep this place and have my daughter move in next door with a reduced rent. I am 65 years old. The house was custom built in 1976, it's stucco with a tile roof and is very sound and in excellent shape..I do not have the cash... Read Full Article