Last week Congress gave the FHA authority to stabilize the Home Equity Conversion Program (HECM). Since HECM’s make up the majority of reverse mortgages this is something we need to watch carefully. The exact implementation of this “stabilization” is not clear, but if it’s anything like the stabilization efforts on the forward mortgage side we can expect a general tightening of requirements to obtain a reverse mortgage. Among the changes HUD is considering is a financial assessment of HECM applications to determine if they can meet the financial responsibilities of the loan.
This still requires the president’s signature, but everyone is gearing up for some changes. HUD is expected to announce the changes in late August with and implementation date for sometime in October.
Keep watching this space and we will keep you informed.