Fort Worth, TX - June 26, 2009 - (RealEstateRama) — It is important for you as a potential reverse mortgage participant or as a current reverse mortgage customer to stay abreast of the changes happening in this particular industry. The changes in 2009 for the Home Equity Conversion Mortgage (HECM) or reverse mortgage program have been the most since its inception more than 20 years ago. The new changes of the reverse mortgage program has proven to be of value to mature Americans, like you, who are over the age of 62 and want to remain in their home while using its equity to supplement their income.
The pertinent changes to the reverse mortgage program include:
* New program offerings. There have been two new programs within the reverse mortgage structure, which includes fixed interest reverse mortgage rates and HECM for Purchase. If you prefer a fixed interest rate reverse mortgage you should understand there are no flexible payment options. You are only allowed to receive a lump sum payment at closing. The fixed interest rate reverse mortgage program does, however, give you a peace of mind when preparing for estate planning. The HECM for Purchase program allows you to purchase a new home. Unfortunately, this program has some clarifications which need to be cleared before all states, like Texas, adopt and mandate this program.
* Payment flexibility. With an adjustable interest rate reverse mortgage you are allowed to have your choice of different payment forms. Remember the purpose of the reverse mortgage program is to allow you to use the equity in your home to supplement your income so you design your payment options. You can chose from a time limit or tenured monthly payment option; a lump sum payment; an equitable line of credit or a combination of all three payment types. The choice is yours as well is the right to do with the money as you please. It is important to note that a fixed interest rate reverse mortgage only has a lump sum payment option.
* Increased loan limits. President Obama increased your ability to draw more equity from your home by increasing the reverse mortgage loan limit to $625,500 until the end of 2009. Again this gives you more equity to draw on which is favorable in a housing market which is failing. The previous limit was $417,000 and may return in 2010
* Protection you desire. Now your rights and property are protected by the new code of ethics and enforcements issued by HUD and FHA. These measures are to ensure the elimination of non HUD approved lenders who have participated in the origination of HECM products. These new measures also ensure your full understanding of the reverse mortgage programs by requiring you to participate in a counseling session with a HUD approved counselor.
* Rising margins and CMT eliminated. If you are familiar with rising margins in the mortgage industry then you understand that the margins are the points (for fee collection) a lender can receive for any given loan. In the reverse mortgage industry the fee increase was based upon the CMT index which significantly increases margins and interest rates and made receiving a reverse mortgage unbearable for some borrowers. Fannie Mae has eliminated the use of the CMT and based the rising margins on the Libor, London’s interest rate index. This change is to spark interest from outside investors in reverse mortgages.
Staying informed is not an option when your future and well-being are at stake. The changes to the reverse mortgage could negatively or positively impact your decision to participate in the program. Whatever choice you make you must understand the program fully.
A thirteen-year veteran of the mortgage industry, Robert Griffin specializes in reverse mortgages and has earned the accolade of No. 1 reverse mortgage broker in the Southwest for three years in a row. The owner of Griffin Financial Mortgage LLC, based in Fort Worth, Texas, his memberships include the National Association of Mortgage Brokers (NAMB), the Mortgage Bankers Association (MBA), the National Reverse Mortgage Lenders Association (NMRLA) and the Better Business Bureau (BBB). Robert Griffin is also co-author of “62 Senior Moments.” If you would like an information packet or would like to set up an appointment with one of our Reverse Mortgage Specialists, Please call (866) 683-3690 or complete our online Reverse Mortgage Information
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