The House to extend reverse mortgage cap suspension through September 2014, which is fantastic news for seniors looking into this program for financial security. When the reverse mortgage program started with the Federal Housing Administration (FHA) in the late 1980′s, the amount of loans per year were limited to just 2,500 that they would insure. By 1995 the limit was raised to 25,000 per year and then in 2006 it was raised to 275,000 loans per year that the FHA would insure. In the past few years Congress has suspended the cap with how many loans the FHA will insure, meaning there is no limit.This is fantastic news because in the past if FHA hit the limit of 275,000 loans in any given year, they would suspend insuring anymore loans for the rest of the fiscal year. Which meant that all lenders in the reverse mortgage industry would also halt lending reverse mortgages to potential clients. With no limit on how many loans the FHA will insure for the year, more lenders will jump into reverse mortgage lending making the market more competitive and those particular loans cheaper for the borrower. In the past, because of the cap on the amount of loans the FHA would insure, lenders and banks were reluctant to lend the reverse mortgage product. The reason is it would cost too much to train employees and implement the program to just have it suspended later in the year and then have to shelve the program until the governments fiscal year starts over again.
Some in the House are debating to completely remove the limit to make the market more competitive for the product, although some are not sure about it just yet. The House Appropriations Committee voted 28-20 to extend the cap through September 30th, 2014.
Please fill out the contact form at the right to have a qualified representative contact you!
House to Extend Reverse Mortgage Cap Suspension through September 2014
![House to Extend Reverse Mortgage Cap Suspension through September 2014]()
Reviewed by Merlyn Rosell
Published :
Rating : 4.5
Published :
Rating : 4.5