The Senate passes Reverse Mortgage Stabilization Act of 2013 late Tuesday evening, following the passage by the House on June 12th. Now the bill must be sent to the President of the United States’ desk to be signed. The Stabilization Act would allow HUD to be more nimble in making changes to the Home Equity Conversion Mortgage (HECM) program, which is HUD’s name for the reverse mortgage. HUD, who oversees the reverse mortgage program, has said that changes to the program would more than likely be coming as early as August and will be implemented by October.Essentially, if HUD wanted to make any changes to the reverse mortgage program before this Act, then they would have to go through a long and drawn out process through Congress to get those changes done. Sometimes those changes would take up to 2 – 3 years, possibly taking the program into financial duress while it is waiting. Of course the program is now in trouble and could have been halted altogether, but HUD nor the reverse mortgage lobbyists wanted that to happen. So with the authority of Congress, HUD would be able to make changes to the program within a matter of months rather than years, which would keep the reverse mortgage program financially stable.
Some of the changes that HUD is looking at making immediately would be to look at previous credit history to make sure the homeowner is financially responsible. Also, another change would be to implementate set-asides for property taxes and homeowners insurance, if it is deemed that the homeowner is not financially responsible. Currently, almost 1 out of 10 homes with reverse mortgages is in default mostly because the property taxes have not been paid by the owner. And lastly, if you are married then both spouses must be on the loan.
These changes are necessary for the future of the reverse mortgage program, as this financial tool will need to be available as another option to the ever growing senior population.
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Senate Passes Reverse Mortgage Stabilization Act of 2013
![Senate Passes Reverse Mortgage Stabilization Act of 2013]()
Reviewed by Merlyn Rosell
Published :
Rating : 4.5
Published :
Rating : 4.5