Reverse Mortgages
The April program dealt with another legal topic of widespread interest these days, reverse mortgages. The guest speaker was Florian Steciuch, a reverse mortgage consultant.
Because of all the common misconceptions about reverse mortgages, I have taken the liberty of including in this blog two excellent recent summaries of this now-standardized financial product by the U.S. Department of Housing and Urban Development, “Frequently Asked Questions about HUD’s Reverse Mortgages,” and “FHA Reverse Mortgages (HECMs) for Consumers.(See links below.)
I can only add to those discussions the fact that recently the two largest reverse mortgage lenders, Bank of America and Wells Fargo, announced their withdrawal from this product market. Also, the FHA recently announced new lower regional valuation limits for any residential properties (no matter how individually valuable) for purposes of applying the three-part test of (a) allowable fraction of the applicable valuation limit, (b) borrower’s age at loan initiation, and (c) prevailing interest rate at loan initiation in order to determine the maximum permissible amount of a reverse mortgage loan.
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