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New FHA Legislation Will Affect Reverse Mortgage Market

Net Equity keeps up with current legislation that affects our industry because this knowledge affects our ability to professionally and effectively serve our clients. Introduced by Illinois Republican Judy Biggert from the House of Representatives, the Federal Housing Administration (FHA) Emergency Fiscal Solvency Act 2012 will establish new mortgage insurance premiums paid by lenders to the FHA and will bolster the Mutual Mortgage Insurance Fund (MMIF). The bill passed by a vote of 402 to 7 on September 17th and is now under review in the Senate.

Mortgages created by FHA-approved lenders are insured by the MMIF. The FHA controls over half of the mortgage insurance market in the U.S.A. It protects banks, savings, loans and mortgage companies against loss on real estate arising from borrowers going into default. It is intended to be a self-funded program because the premiums paid by borrowers are supposed to cover the expenses of running the program and cover losses when loans default. However, many mortgage insurance providers including the FHA faced higher default rates after the 2007 housing bubble. As a result, the MMIF was depleted by all the payouts to lenders. The FHA plays an important role in restoring the housing market by providing mortgages to working families and seniors who might otherwise not be approved for mortgages. In order for the FHA to continue to provide single family mortgages and Home Equity Conversion Mortgages (HECMs) there needed to be a reform.


Renters beware........

2010-04-13 17:31:03 by WretchedRabbit

Tuesday, April 13, 2010
Members of Reverse Mortgage Fraud Ring Plead Guilty
Kelsey Torrey Hull, 38, and Jonathan Alfred Kimpson, 27, both of Lithonia, Georgia, pleaded guilty in federal district court to a conspiracy to defraud reverse mortgage lenders and the Federal Housing Administration (FHA) insurer of the loans. Hull pleaded guilty to an additional bank fraud charge involving mortgage fraud, and Kimpson pleaded to an additional identity theft charge.
According to the charges and other information presented in court: Reverse mortgages were designed to assist with the financial security of seniors, ages 62 or older

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