| Are you currently thinking about a reverse mortgage? | | | | county by county throughout the United States. The |
| Have you been told that with your property value, you | | | | Modernization Bill would do away with county by |
| really might be better off going with a jumbo or | | | | county limits and establish one national limit, $417,000, |
| proprietary reverse mortgage, but you really wanted | | | | which is higher than any current limit for any county in |
| to get the government insured Home Equity | | | | the nation. |
| Conversion Mortgage. Have you looked at the | | | | HECM's are limited to refinances only at this time, and |
| proprietary products and thought that you liked the | | | | the modernization bill would open these loans up for |
| higher balances but really disliked the higher interest | | | | purchases. Seniors wishing to move closer to family or |
| rates associated with most of those programs? Help | | | | downsize could use a reverse mortgage to purchase |
| may be very near for you. | | | | their home. And finally, the Bill would lower the |
| In 2006 both the House of Representatives and the | | | | maximum fee that could be charged to a senior from |
| Senate approved Bills known as FHA Modernization | | | | the current 2% down to 1.5% of the maximum claim |
| Bills designed to help the Federal Housing | | | | amount ($417,000). |
| Administration modernize their approach to how they | | | | There will still be a market for proprietary products for |
| deal with the lending needs in this country. The Bills | | | | properties with values exceeding somewhere around |
| don't deal solely with Reverse Mortgages, but we will | | | | $700,000, but you need to have your information run |
| touch on the parts that do. The House was first to | | | | on a reverse mortgage calculator to see what makes |
| pass their Bill last summer and then the Senate passed | | | | the most sense for you. And keep in mind that the |
| their version of the Bill, Senate Bill 2338 on December | | | | Modernization Bill has not been signed into law yet and |
| 14, 2007. The Bills have some different provisions and | | | | is subject to changes as the House of |
| must go back to a joint committee now to iron out | | | | Representatives and Senate Conferees meet, |
| those differences before a law can be placed before | | | | negotiate and reconcile their differences between their |
| the President for signature, but there is very little | | | | versions of the Bills. They must agree on their |
| difference in the House and Senate version with | | | | proposed changes, issue what is called a Conference |
| regard to Reverse Mortgages. Many legislative insiders | | | | Report which is then voted on by the full House and |
| believe the Senate provisions will be the ones adopted | | | | Senate. |
| so those are the new provisions I will discuss. | | | | Only then can a final Bill be place before the President |
| There is now a cap on the number of HECM loans | | | | for signature. Based on the overwhelming support for |
| FHA can insure and we have bumped up against that | | | | the Bill in both branches of Congress and the recent |
| cap in the past which has caused senior homeowners | | | | remarks of the President, it's not really the Bill will go |
| to be delayed in getting their reverse mortgages. The | | | | through but when it will go through and exactly what it |
| Modernization Bill Permanently eliminates that cap. | | | | will look like so if you're one of those who wanted a |
| Homeowners qualify for HECM loans based on age, | | | | reverse mortgage but didn't get one because you |
| property value and the limit set for the county in which | | | | didn't like the proprietary product, your program may |
| they live. These limits currently can vary drastically | | | | be here in the very near future. |