The U.S. House of Representatives passed a comprehensive housing package comprised of two separate bills the House bill is H.R. 3221.
Several other pending bills, including FHA Modernization language were included into H.R. 3221. HECM amendments in the FHA Modernization section of H.R. 3221 include:
•· Elimination of the authorization cap that limits FHA to insuring no more than 250,000 HECMs. Our industry has exceeded this limit long ago.
•· Establishing a single national maximum loan limit for HECM, at $550,440.
•· The maximum allowable origination fee would be established at 2% of the first $200,000 of maximum claim amount, plus 1% of the balance above that. The overall cap is $6000 adjusted periodically for inflation.
•· Enable HECMs to be made on co-op units.
•· Prohibition on required purchase of an annuity in conjunction to attaining a reverse mortgage.
•· A new requirement for the HUD Secretary to issue regulations to protect borrowers from the marketing of financial and insurance products "not in the interest of such homeowners."
•· A requirement for the Secretary to conduct a study within twelve months of that analyzes and determines the effects of reducing HECM mortgage insurance premiums. Mortgage insurance is one of the perceived large costs in attaining a reverse mortgage. Many CPA's and financial planners discourage their clients from attaining reverse mortgages because of the perceived large costs.
The passage of this bill does not assure it becomes into law or will be signed by the president. A article in the Los Angeles Times indicated the president threatens veto on this bill.
The Senate version of this bill contains HEMC origination fees limited to 1.5% of the of maximum claim amount. To learn more about reverse mortgages and reverse mortgage updates contact Angella 866-949-7030 or log onto www.reverse-your mortgage.com
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