FINANCES
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JUPITER IMAGES/STOCKBYTE/THINKSTOCK
NEW REVERSE MORTGAGE RULES A MIXED BAG FOR SENIORS BY KAREN FINUCAN CLARKSON
T 1906308
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Gazette SENIORS | January 2014
he intent of new rules governing Home Equity Conversion Mortgages (HECM) is to encourage the use of a reverse mortgage as a tool for long-term financial planning as opposed to short-term crisis management.The changes “simplify the process, add some protections and help seniors plan their finances in a better way,� said Tony Miller, a reverse mortgage specialist with Credit Union Mortgage Association in Fairfax,Va. To make the loans safer, the U.S. Department of Housing and Urban Development (HUD), which oversees the
HECM program, has lowered the size of loans; limited the amount of loan proceeds that can be tapped during the first year; increased fees; and, in some cases, required escrow accounts for taxes, insurance and repairs. These changes could put the loans out of reach for seniors with more modest amounts of equity in their homes, according to Song Hutchins, president and CEO of the HUD-sanctioned Asian-American Homeownership Counseling Inc. in Rockville.
Reverse mortgages have existed in
one form or another for roughly 50 years, according to the National Reverse MortGazette.Net