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FHA Modernization, Including HECM Amendments, in Foreclosure Help Bill Passed by the House

Mortgage and Lending with Reverse Mortgage Advisor

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

Connie Ramey

I am waiting , since Dec 2007 for the HECM loan limits to increase so I =can refi and get more from my equity.  I hoped this would happen by Feb 2008 but here we are mid-May 2008.  Is this meant to say the House is actually getting the lead out and moving forward?.....PLEASE?


May 11, 2008 02:23 PM
Angella Conrard, Reverse Mortgage advisor

Yes, Connie that is correct. But they still have to pass the senate version & come up with something the president won't veto. The language is rolled up into a huge housing/mortgage industry revamp & they still have some ways to go. I am guessing earliest would be this fall/winter. You can always contact me for a update.


May 12, 2008 06:51 AM
Angella Conrard
Reverse Mortgage Advisor - San Clemente, CA

Connie, Please send me your e-mail to aconrard@gmail.com, I will add you to my updates list & let you know.

Jun 25, 2008 03:28 AM
Leon Wallace

I lost my business in 2008 and I lost my home through foreclosure in 2010.  Since I am living in the house,

I have 6 Mns to redeem the owneship.  I am 68 years of age and want to use the reverse mortgage to

purchase the house in a short sales, in order to show the required equity required to secure the reverse

mortgage.  Do you have information regarding the use of the reverse mortgage to buy back my house?

Please advise, and thanks for looking out for us seniors!


Leon Wallace

1010 Emerson Av N

Mpls, Mn 55411


Oct 01, 2010 06:20 AM