October 23rd, 2013 12:02 PM by Juan Luis Rodriguez-Kohly
As I announced in my recent Post there will be more changes to the FHA Reverse Mortgage Program - HECM - on January 13, 2014.
Then, new applicants will go through "financial assessment" which mean that FHA want to be sure that they have the sufficient means to support themselves and still be able to pay for the Property Taxes and Home Owners Insurance.
The reason for this change is that in the past, many Seniors, spent all the funds received from the Reverse Mortgage and stopped paying the Taxes and Insurance on their home.
Since these two conditions are obligatory in order to maintain the mortgage on the home, failure to pay them has led to a default and to foreclosure and loss of some Senior’s homes.
Of course, neither the Government nor the Lender want to see a Senior lose their homes.
In order to determine the financial capability, the proceeds received from the Reverse, all income from valid sources, investments, etc.., will be considered.
Also to be considered is the Credit History and financial responsibility of the Senior.
The Program might require that a "Set Aside" reserve be established to pay for future taxes and insurance premiums for a few years. This will reduce the amount that can be received from the Mortgage, but would help to prevent a foreclosure in the future.
While these measures may limit the number of Seniors that may get a Reverse Mortgage, they will be beneficial to the ones that will be able to obtain them by increasing the possibility to stay in their home. We will wait and see.
If you or any one you know has been postponing getting a Reverse Mortgage, DON’T wait any longer. If you are a Florida Resident, call me today. 786-262-6486
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