Prepared for trevor_burns | Delivered August 27, 2020
Reverse Mortgages Regulations
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To find information on pending reverse mortgage regulations at the federal level/within the State of California or the reverse mortgage regulations discussed during the last term of the Obama administration.
In September 2019, the Trump administration announced "
to the U.S. Department of Housing's reverse mortgage program, the Home Equity Conversion Mortgage (HECM)."
The secretary of the U.S. Department of Housing and Urban Development (HUD), Ben Carson delivered a written testimony in September that
noted the proposed changes.
Carson's recommendations in his testimony included:
A recommendation for the amendment of HECM's loan limit structure by Congress to “reflect
variation in local housing markets
and regional economies across the U.S. instead of the current national loan limit set to the level of high-cost markets in the forward program.”
A proposal to congress to "set a separate
HECM capital reserve ratio
as obligations to the MMIF (Mutual Mortgage Insurance Fund),
on the basis that it would allow more “
of the program costs and decrease the cross-subsidization that occurs with mission borrowers in the forward mortgage portfolio.”
A proposal that “FHA
eliminate HECM-to-HECM refinances
as these loan transactions result in greater appraisal inflation, increasing program costs, and negatively impacting GNMA guaranteed HECM MBS (HMBS) due to quick ‘churn’ in pool participations.”
Carson testified before the House Financial Services Committee noting that
within the HECM program is still a constant challenge. However, he noted that HUD proposed a number of key reforms to
product remains a viable option
for America’s seniors that desire to ‘age in place
In 2013, Obama signed the
Reverse Mortgage Stabilization Act
The act gave the HUD a green light to "to revamp the Federal Housing Administration’s
Home Equity Conversion Mortgage Program.