Sunday, July 6, 2014
As I have previously discussed, the Federal Housing Administration (FHA) made changes to the Home Equity Conversion Mortgage program that made it more difficult for home owners to qualify for reverse mortgages. Recently the FHA announced that reverse mortgages with a fixed rate and a line of credit will no longer be insured through the program, creating further restrictions on reverse mortgages. While many homeowners believe fixed rate reverse mortgages to be a safer option, they often carry more risk. Ginnie Mae, also an agency with the Department of Housing and Urban Development, has created a similar ban for insuring these types of reverse mortgages.
See Bonnie Sinnock, OnWallStreet, Risky Form of Reverse Mortgage Nipped in the Bed by HUD, National Mortgage News, June 24, 2014
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.