Reverse Mortgage HECM changes Effective October 2nd 2017

/Reverse Mortgage HECM changes Effective October 2nd 2017

Important Announcement: HUD makes Reverse Mortgage HECM changes effective 10-2-2017

Here is what has changed:

PLF (‘Principal Limit Factor’, this is how they adjust for losses)- They lowered the floor rate from 5.06% to 3.00%

  1. This will encourage lenders to offer lower lender margins to achieve higher principal limits
  2. It will mean greater competition and flexibility
  3. Lower compounding rates on funds that were borrowed
  4. Lower growth on the line of credit

MIP (Mortgage Insurance Premium) – Changed initial MIP and annual MIP

  1. Initial MIP is 2% across the board for all claim amounts (this is an increase for some and a decrease for others)
  2. Annual MIP decreases from 1.25% to .50% annually.

 

Why did HUD make these changes?

They needed to make changes to adjust for losses, pay for losses and maximize the funds available for the borrower.

Please contact us with any of your Reverse Mortgage needs. Please call us or fill out our request a quote form. Thanks

 

Want to learn more about Reverse Mortgages? Click Here

 

 

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2017-09-26T09:07:57+00:00September 25th, 2017|

About the Author:

A native Phoenician serving Arizona Homeowners with over 15 years lending experience and currently the Vice President and Partner of Signature Home Loans LLC. Eddie has been a mortgage broker since January 2003.

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