FHA Reverse Mortgage case numbers

Effective this week, FHA

HUD for the second time in two years has been forced to reduce the proceeds that borrowers receive in the FHA insured reverse mortgage program. These changes to the proceeds are necessary to ensure that the program is sustainable.

October 4, 2010, the principal limits (gross proceeds) for the FHA reverse mortgage programs will decrease approximately between 1% and 5%. The changes will have less of an impact on younger borrowers whereas the older borrowers will see a bigger reduction in the amount of money that is available. The annual mortgage insurance premium that is charge borrowers will increase from 1/2% to 1.25% annually. Mortgagee letter 2010-28 describes the changes.

HUD is also implementing a new program called the HECM “Saver”. This is a lower cost version of the HECM “Standard”. The HECM Saver will have an upfront mortgage insurance premium of 1% of the maximum claim amount (value up to $625, 500). The HECM Standard has an upfront mortgage insurance premium of 2%. Both of the reverse mortgages will have an ongoing mortgage insurance premium of 1.25% annually.

The HECM Saver will appeal to borrowers who do not need as much money and are attracted to lower costs. The principal limits (proceeds available) will be less than the current HECM “Standard” program by between 10 and 18% of the new limits.

It is unfortunate that our housing market continues to be challenged. The above changes to the FHA reverse mortgage programs are direct result to those challenges. Time and time again, I have heard HUD representatives comment that they understand and are committed to the importance of sustaining the reverse mortgage program for older Americans. These changes are necessary in order to keep the program intact and available.

Higher rates = Higher Home prices?

2011-08-23 15:15:52 by irvinerealtor

The Federal Housing Administration (FHA) will reduce single-family loan limits in the highest-cost metropolitan areas from $729,750 to $625,500 starting Oct. 1. The reduction, announced Friday afternoon, will affect 669 of the 3,234 jurisdictions in which the FHA insures loans.
The current floor loan limit in areas where housing costs are relatively low will remain unchanged, at $271,050 for one-unit properties. The mortgage loan limit and maximum claim amount for FHA-insured reverse mortgages will also remain unchanged, at $625,500.
The current maximum loan limits were to be retired in January 2009, but legislation delayed implementation of the loan-limit...

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