FHA reverse mortgage fact Sheet

FHA Mortgage Approval Process

Reverse mortgages are complex, often confusing financial products. If you or an elderly relative are even considering one, it’s important to know all of the risks and pitfalls beforehand. With that in mind, we’ve created this list of reverse mortgage facts to help you understand what can really happen if you take out one of these loans.

It’s hard to separate fact from fiction in the reverse mortgage world. On the one hand, you have the Fonz, Henry Winkler, on television telling you that you can “take control” and “live a better retirement.” On the other, you have sensationalist articles in major news publications that only tell half the story. Here’s the truth as we see it.

The History of Reverse Mortgages

  • In 1961, Deering Savings & Loan in Portland, Maine originated the first reverse mortgage.
  • In the 1970′s, multiple private lenders offered some type of reverse mortgage.
  • In 1983, the United States Senate Special Committee on Aging made a proposal for an Federal Housing Administration (FHA)-backed reverse mortgage program.
  • In 1984, American Homestead created a program that allowed borrowers to stay in their homes.
  • In 1987, the Home Equity Conversion Mortgage (HECM) began as a pilot program as part of the Housing and Community Development Act.
  • In 1988, President Ronald Reagan signed the act that allows HECM to insure reverse mortgages.
  • In 1998, the HECM program, still operating as a pilot, becomes permanent. The FHA gains the authority to insure 150, 000 reverse mortgages per year. Previously, HECM origination was capped at relatively low numbers.
  • Originations pick up throughout the 2000s, rising from under 10, 000 per year in the 90s to a peak of over 114, 000 in 2009.
  • In 2011, the FHA is given the authority to insure up to 275, 000 reverse mortgages per year, though annual demand has never approached this level.
  • As of 2012, the reverse mortgage market is primarily non-depository institutions originating HECM loans.

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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FHA's 2014 Loan Limits to Change in Nearly 650 US Counties  — National Mortgage Professional Magazine
The changes announced today are effective for case number assignments between Jan. 1, 2014, and Dec. 31, 2014. “As the housing market continues its recovery, it is important for FHA to ..

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