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| As borrowers begin utilizing reverse mortgages on purchase transactions, the government clarified guidelines on the program. In other reverse news, a law firm and a trade group have teamed up to train reverse mortgage lenders about operating ethically and responsibly.The U.S. Department of Housing and Urban Development recently issued further guidance on home-equity conversion mortgages for purchase transactions. In Mortgagee Letter 2009-11, HUDÂ said initial mortgage insurance premiums on purchase HECMs are 2 percent, and there is generally no right-of-rescission.
The loans are available for the acquisition of one- to four-unit owner-occupied properties that meet minimum FHA standards. Any existing HECM balances must be paid off prior to a purchase transaction. Land contract refinances are acceptable transactions, but cooperatives, home still under construction and some manufactured homes are not permitted. In an effort to avoid the potential for “buy and bail,” HUD instituted stiffer verification requirements for borrowers who plan to rent out their current residence Generation Mortgage Co. boasted in a statement last week that it closed its first HECM purchase transaction. The borrowers purchased a $420,000 condominium in Southern California. An announcement this month from Mortgage Cadence Inc. indicated that enhancements to its Orchestrator technology platform enable lenders to conform to Fannie Mae’s recently introduced live pricing requirements. Fannie’s new pricing model reflects the forward secondary market commitment and delivery process. A series of interactive workshops were developed to help reverse lenders integrate the National Reverse Mortgage Lenders Association’s Code of Ethics & Professional Responsibility into their routine operations, a recent news release said. At one three-hour workshop, NRMLA President Peter Bell joined Weiner, Brodsky, Sidman, Kider partner James Brodsky to provide instruction, discussion and role playing. Next Generation Financial Services said today that it expects to add a hundred new reverse mortgage originators in 2009. The expansion is part of a national effort to develop reverse mortgage business. MortgageDaily.com advertiser LoanWell America arranged a paid programming deal on Fox Business News, Media Entertainment Productions Inc. announced last week. LoanWell’s presentation focuses on how seniors can use reverse mortgages to “maintain their quality of life.” Golden Gateway Financial attracts loan prospects with “award winning” online reverse mortgage calculators, a statement this month said. A subsequent statement noted that activity on its calculators last year indicated an increasing number of seniors are considering reverse mortgages to offset investment losses. Golden Gateway suggested in its news release that prospective reverse mortgage borrowers should act now before their property values fall further. Lone Star Reverse Mortgage hoped to generate business with a March 2 announcement highlighting the recent increase in the reverse mortgage limit to $625,500. |
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