Roger Howell

I'm proud to announce that we now have the reverse mortgage program, the HECM, available for my clients.

This is a program for homeowners 62 or over that want to convert their home equity into a monthly check, a line of credit , or simply withdraw a lump sum of cash. there is no credit, income, or asset verification and best of all, there is no monthly payment check to write. The house pays for itself! When the borrower passes away or moves out, the loan becomes due. If the home is worth less than the outstanding balance, the lender takes the home back at a loss. If there is equity, the heirs can sell and keep the difference, or refinance out of the reverse mortgage. The heirs are not responsible for the loan. This program requires the borrower to get counseling from a third party before making application.

Now that said, it not the be all end all for every borrower. There are fees involved and it can be an expensive source of income. However, it can be used to pay for in home care, medical expenses, to help a family member and many other uses that might not be feasible if there were no other sources of income.

I will be posting more about them as we write reverse mortgages. Please call me at 208-955-1234 x30 if there is anything I can do for you.

I just received news about Fannie Mae/Freddie Mac guideline changes that could have an affect on our business.

http://www.housingwire.com/2008/03/03/fannie-mae-new-york-ag-reach-agreement-on-appraisal-practices/

It appears only to affect NY, but I can see Fannie Mae and Freddie Mac rolling this to other states to avoid duplicate lawsuits by grandstanding AGs.

Evidently one of the changes, set to begin 1/1/09, is that mortgage brokers would not be able to submit appraisals to lenders directly. Our wholesale lender would have to order the appraisal in order for the loan to be sold to Fannie Mae/Freddie Mac. This only applies to Mortgage Brokers, not banks.

This will have the effect of slowing down the process, requiring the borrower to pay for the appraisal upfront instead of at closing, and would limit the ability of the broker to shop for the best deal for the client.

Furthermore, the question of using the appraisal at another lender has not been answered. As it stands, the appraisal is the property of who ever orders it, and there is no requirement to release it to another lender even if the borrower has already paid for it. That could leave a borrower paying for more than one appraisal if they're turned down at one lender or need to change lenders due to rate or program changes.

Who is behind this? It came out of the lawsuit by NY Attorney General Andrew Cuomo against several lenders. This was part of the settlement negotiated. It seems part of the ongoing battle between large mortgage banks and the much smaller mortgage broker community. Banks have been trying to put brokers out of business because brokers originate 2/3rds of the residential loans in this country. They seem to have many willing allies in political circles who are looking for a scapegoat in today's market. Interesting enough, some of the biggest fines and penalties paid for predatory lending were by banks such as Chase, Citibank, and Countrywide to name a few.

By adopting the new guidelines, it will cause delays, more expenses, and ultimately less choice for the borrower.