FHA reverse mortgage home conditions Standards

With an FHA mortgage

September 24th, 2013 | by Alyssa Gerace Published in , , |

The housing market bust correlated strongly with a sharp decline in reverse mortgage origination, but with the federally-insured program set to undergo substantial changes, the product could experience a rebirth, says a recent Bankrate .

Reverse mortgage volume increased significantly during the height of the housing market bubble and were touted as a way for retirees to convert their home equity into cash. However, as home values dropped, so did home equity conversion mortgage (HECM) volume, indicates data from the Federal Housing Administration.

The FHA’s insurance fund suffered substantial losses on its reverse mortgage book from defaults of HECMs originated prior to the housing bust, prompting upcoming changes to the program, says Stephen Malpezzi, a professor at the Wisconsin School of Business’ Graaskamp Center for Real Estate in Madison, in an interview with Bankrate.

The effectiveness of the upcoming FHA reforms in the event of another boom-and-bust cycle are unclear so far, says Malpezzi, but the reverse mortgage product has upside.

“[T]here is certainly room for this market to expand somewhat as market conditions improve, if FHA’s reforms take hold, ” he tells Bankrate. “There are about half a million HECMs outstanding, but there are roughly 25 million homeowner households with a head 62 or older.”

Other topics addressed in the interview include changes in home equity and value, the consumer protections that have been put in place in the last few years for reverse mortgages, and how consumers can distinguish the difference between beneficial and non-beneficial usage of the loan.

Read the at Bankrate.

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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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A New Day for Reverse Mortgages?  — National Mortgage Professional Magazine
“The only opportunity for reverse mortgages to be foreclosed upon are due to a lack of payment on taxes and insurance.” Needless to say, advocates of the product have often found it very difficult to sing the praises of ..

FHA Report Shows Strong Agency Turnaround, Insurance Fund Improvement  — Reverse Mortgage Daily
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