September 6th, 2013 10:38 AM by Juan Luis Rodriguez-Kohly
Well, HUD in its infinite wisdom has decided to make changes on the HECM Reverse Mortgage Program. I will try to summarize them.
THESE CHANGES DO NOT AFFECT LOANS ALREADY CLOSED.
Why the changes? For very valid reasons. In the last few years, many Seniors that have used up all the funds received from their Reverse Mortgages, have stopped paying Property Taxes and Insurance on their homes. This is a PRIMARY CONDITION of their mortgages. This constitutes a Default, and unless it is paid by the Borrower, has led to Foreclosures and loss of homes.
In order to help to ensure that Senior Borrowers will be able to sustain themselves financially for longer periods of time, these changes had to be made. Also, it helps preserve more of the Equity of the home. They are, for the most, very wise.
Effective for those Loans where the FHA Case Number is issued on or after September 27, 2013:1) Amount you can receive will be decreased by approximately 15%2) During the initial 12 months, the Borrower may not draw more than 60% total of the funds. If there are obligations (mortgages, liens, etc...) to be paid off, and there are funds left, the Draw can not be more than the total of the obligations plus 10%.3) The Upfront "Mortgage Insurance Premium" (MIP), will increase considerably when the disbursements exceed 60% of the Initial Principal Limit.
What does this mean? If you are interested in doing a Reverse Mortgage on your home, DO NOT WAIT ANY LONGER. If you wait you will receive LESS proceeds.
You must be counseled and apply AS SOON AS POSSIBLE. We must have the Counseling Certificate and submit an Application no later than Sept. 23, 2013. Call me at 786-345-0783 or 305-445-9003 or email me at RodKohly@gmail.com.
More changes are coming effective January 13, 2014. I will cover it in another Post
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