Ask Bob - Changes are coming for reverse mortgages

October 30, 2008|By BOB POOR

Q: Some time ago, you wrote about reverse mortgages for seniors 62 and older. Have you heard about any changes that will make reverse mortgages easier to obtain?

A: Easier ... no, not really. However, there are changes afoot. The following information is from a National Reverse Mortgage Lenders Association (NRMLA) news release this month.

The Department of Housing and Development (HUD) approved a single national loan limit of $417,000 for federally insured Home Equity Conversion Mortgages (HECM). Previously, the HECM program assigned different lending limits by county, ranging from $200,160 in rural areas to $362,790 in the highest home value areas.

Similarly, existing reverse mortgage borrowers whose home value is higher than the new HUD limit might be able to increase their benefit by refinancing the reverse mortgage and are encouraged to contact their lenders.


"HUD should be applauded for its expedient implementation of the single national loan limit for the HECM program, especially during such a tumultuous period," said Peter Bell, president of NRMLA. "The higher single national loan limit and other provisions expected to be implemented in the coming months make reverse mortgages a more viable retirement financial option for a broader audience who can receive higher benefits at lower origination fees than ever before."

HUD is aiming for an effective date of Nov. 1, however, the exact date will not be finalized until HUD issues a mortgage letter on the new loan limit.

Reverse mortgages are originated largely by private lenders. The most popular is the HECM, which is insured by the Federal Housing Administration (FHA), an arm of HUD. More than 450,000 HECMs have been made since 1989.

NRMLA is a nonprofit trade association based in Washington, D.C., whose mission is to support the continued evolution of reverse mortgages as an important financial option for senior homeowners. Members sign a Code of Conduct pledging to abide by guidelines that assure fair, ethical and respectful practices in offering and making reverse mortgages available to seniors.

Details on NRMLA, reverse mortgages and a list of reverse mortgage lenders in each state are available on NRMLA's Web site at

So if there is a reverse mortgage in your future, sounds like it will be better, if not easier.

Hagerstown resident Robert A. Poor is a member of the Society of Senior Advisers and provides senior professional services for reverse mortgages and personal insurance. He also is a member of the Senior Referral Center of Hagerstown. Questions are welcomed at or by mail c/o The Herald-Mail, P.O. Box 439, Hagerstown, MD 21741, ATTN: Robert A. Poor column.

The Herald-Mail Articles