Good info... thanks for the post :)

in regard to the MIP, there are actually a number of reasons and benefits:

 1.It enables the loan to be non-recourse where neither the borrower nor their heirs are personally responsible for any debt over the value of the collateral. 

2. In the even the lender becomes insolvent or can no longer manage the loan, HUD steps in and continues managing the loan - also why the second lien in favor of HUD

3. Because of the MIP, lenders are able to offer the HECM at extremely low rates - T-Bill + 1.5 (or lower) is a fantastic rate in almost any market.

4. it insures that the borrower will continue getting their tenure payments and/or access to their credit line regardless of value of property or market conditions

in regard to the title insurance, it usually insures the amount of the mortgage which, as explained above, is at 1.5 times the claim limit.

hope this helps

Excellent post Chris - great info David!  I have a Facts Sheet that I give to my borrowers/potential borrowers and will update today with some info that I clearly missed. 

All the best,

Kelly Robertson, President, LoanSigner101, www.SigningAgentCoach.com

Thanks Chris.  Your blog did get reference in a "Mortgage News Clips" email letter.  Great information. I do not know if it makes a difference but I sent in to AR about you receiving the reference. AJ

Thanks for the info David, that will help.

Kelly, I think a fact sheet is a great idea and I am glad I could help

Thanks for the reference AJ

Thank you for the information. Reverse mortgages may become popular .

Yes Gita, I think they will to. 8000 People become eligible for one every day!

Very good information. Thanks for taking the time to share with us!

Excellent information!  Nicely put and in plain english.  I am actually in the process of learning these loans to better present them to the borrowers.  There is a lot to learn with RM's.  Thank you for sharing.

Thank you.  I have my 1st RM closing coming up.

Hello Chris,

I specialize in taking the applications and performing the closings.  Can you add me to your list of closers?  Please feel free to take a look at my profile...Thanks!

Reverse mortgages are where its at.  Granted, the pipeline is much longer due to the counseling requirements and what not, but the baby boomer generation are all approaching retirement and these mortgages are going to continue to increase in number, especially since they are government backed.  Good post Chris, a lot of people are still a little confused by the whole reverse mortgage thing.  One of my largest customers specializes in reverse mortgages, so if anyone has any questions, I can perhaps help out as well.

Chris,

 thanks for the info on these issues. We get these questions a lot and I'm glad you put this up here!

Rogan McGillis

www.reversemortgagecity.com/blog

I think the biggest hurdle in this type of market is educating the public.  I wasn't in the biz back in the 80's but apparently there is a bad taste in the mouth of seniors because of the way they were back then.  If we can just educate the public that this is a totally different program, I think it will take off like we have never seen. 

Great Post, I have just started doing reverse mortgages this year.  I find them very valueable for some of my clients.  I find the most resistance from the children not the client.

John Thomas - Certified Mortgage Planner