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New Reverse Mortgage Product Announced
Talk has gone on for some time about the possibility of a new reverse mortgage product from HUD. It seems that recent developments indicate that a new reverse mortgage is on the horizon, but just how soon it will be available is not yet clear. At a conference of the Mortgage Bankers Association in San Diego, CA, the Director of the Office of Single Family Program Development at HUD, Meg Burns, announced that a mini-HECM (Home Equity Conversion Mortgage) is in the works.
One possible reason for the new reverse mortgage product is the action which was just taken by Congress to subsidize the HECM program at a cost of $798 million. The recent economic situation has forced more seniors to rely on a new reverse mortgage to provide them with an monthly cash flow. This influx of new reverse mortgage applications has put a strain on the system.
Another senator had recently proposed that the actual amount given to each senior on the new reverse mortgage be lowered by a small amount – possibly up to 5%. He said that if this were initiated, then subsidizing the plan would not be necessary. Many seniors, however, really cannot afford to have their income reduced even further. Other cuts have already taken place.
New Reverse Mortgage – Smaller Amounts
The new reverse mortgage mini-HECM, it seems will provide seniors with an opportunity to work ona new reverse mortgage that is based on less than the entire amount of the equity. The new reverse mortgage product is to be offered along with the more standard HECM product.
The new reverse mortgage product is not fully developed yet. Burns also stated that HUD will also have to develop a way to regulate the use of the product. One concern held by HUD is that it could start a stampede of people wanting to refinance their HUD reverse mortgage. Some time will be needed to study the possible effects once it is released.
The new reverse mortgage mini-HECM may also lower the interest rate, too, but more details need to be revealed. Truly, it is a product that many want to look into, but the details are not yet forthcoming. This is leading many to guess at what might be in it.
New Reverse Mortgage Lender
If you would like more information, please call (866) 683-3690 or visit our website to research the new reverse mortgage.
Tags: new reverse mortgage, reverse home mortgages, reverse mortgage new home
