Josh Borba

NRMLA was successful again at having the cap on HECM lending increased. This is great news for borrowers and lenders alike. The HECM cap limit issue has been a concern for several years now, seeing as though we reach our cap several years back.

NRMLA is pleased to report that the omnibus spending bill signed by President Obama yesterday contains language that gives FHA the authority to continue insuring HECMs for the balance of the current federal fiscal year ending September 30.

By law, FHA cannot insure more than 275,000 HECMs. The cap was reached several years ago, but NRMLA has successfully lobbied Congress to suspend the cap thru various spending bills and other measures.

We expect Congress to pass new appropriations legislation later this year, so that federal agencies, like HUD, will receive new funding when the new fiscal year begins October 1-and that our cap suspension will once again be included.

Good work NRMLA! If you're a lender/broker in the reverse mortgage business and are not a member of NRMLA, you should seriously consider joining their organization. Check out their website: http://www.nrmlaonline.org/

Reverse Mortgage Lenders

Mortgagee Letter 2009-07 Raises Limits to $625,500 for the Home Equity Conversion Mortgage (HECM)

The U.S. Department of Housing and Urban Development published Mortgagee Letter 2009-07, which officially raises the national limit for Home Equity Conversion Mortgages from $417,000 to $625,500 for the remainder of 2009. It will also change the limits on the "forward" side as well.

From the mortgagee letter...

FHA Single Family Programs Affected:

The loan limits described in this Mortgagee Letter are effective for those mortgages insured under the following Sections of the National Housing Act: 203(b)(FHA's basic 1-4 family mortgage insurance program - including individual condominium units), 203(h)(mortgages for disaster victims), and 203(k)(rehabilitation mortgage insurance).

FHA loan limits for Section 255, Home Equity Conversion Mortgages (HECM) are effective immediately for those loans closed on or after the date of this mortgagee letter. Further instructions for HECM loan limits are set forth below.

Read the Full Mortgagee Letter: Mortgagee Letter 2009-07

A great place to find the new loan limits: https://entp.hud.gov/idapp/html/hicostlook.cfm

I just came accross this on HUD's website. We are all well aware of what's happening in the current real estate market. Every forclosure effects the real estate market and is pushing home prices down. This resource that could benefit someone you know and perhaps help someone save their home.

In light of the economic conditions, including declining home values and the increase of resetting mortgage rates, many Americans are facing significant challenges that are attributing to the alarming rate of foreclosures. HUD-approved Housing Counseling Agencies can help homeowners navigate their financial challenges.

If you are...

• Concerned you may lose your job,
• Having trouble balancing your family budget,
• Worried about your mortgage interest rate resetting,
• or need someone to talk to regarding your mortgage

contact one of the HUD-approved Housing Counseling Agencies.

	Call (877) HUD-1515 (1-877-483-1515) or
	Search for a Counseling Agency in your area

"Keep Your Home. Know Your Loan Toolkit"

HUD is urging community, cultural, faith-based and political advocates to become involved in the campaign. In addition, HUD is seeking homeowner associations, real estate brokers and other members of industry to take an active role.

Target cities: Six cities were chosen for the launching of the campaign which are New York, Miami, Chicago, Detroit, Los Angeles, and Phoenix.

The economic stimulus bill signed into law by President Obama yesterday (2/17/09) raises the single national loan limit for HECMs (Home Equity Conversion Mortgage) to 150% of the Freddie Mac loan limit. Currently, that would create a HECM limit of $625,500. The higher limit is only applicable for loans made during the balance of 2009.

This will not take effect until HUD issues a Mortgagee Letter. The timing is still unknown as to when the Mortgagee Letter will be released.

What does this mean to borrowers? For senior homeowners will higher value homes this will have a huge impact. Since the jumbo reverse mortgage market dried up several months ago, seniors with higher value homes have been limited to the lending limit of $417,000 and before that $362,790. The additional $200,000 +/- increase will mean a large increase in the net benefit available to seniors in higher value homes.

For more information: Reverse Mortgage Lenders

or call Josh Borba - 1-888-888-4834 ext. 102

Rates on Fixed Rate Reverse Mortgages have increased slightly to 5.63% from 5.56%. That is still a fantastic rate. For more information visit www.mlsreversemortgage.com.

Fixed rate reverse mortgages continue to gain popularity, although they are not right for everyone. They require a full draw of all funds available, which means that you start accruing interest at closing on your full loan amount. Adjustable rate reverse mortgages allow for a line of credit. With the line of credit, you only accrue interest on the money drawn.

Questions? Call Josh Borba at 1-888-888-4834 ext. 102.