On October 2, 2017 Senior Reverse Mortgage Benefits Will Be DRASTICALLY CUT
On August 29, 2017, the Reverse Mortgage world was stunned by HUD Mortgagee Letter 2017-12. In this letter, HUD has decided to drastically reduce the amount of money that a senior qualifies for with a Reverse Mortgage. Let’s give some examples…
A 72 year old senior with a $200,000 home can currently(before this change) qualify for $118,200, but after the change they will only qualify for $93,400. An 82 year old with a $200,000 home currently qualifies for $134,800 but will only get $109,000 in the future, and a 62 year old will go from a $104,800 qualification to just $82,000. This is a drastic change in qualification that will leave many seniors(especially those with mortgages to pay off) out in the cold.
The powers that be blame this on the fact that the FHA’s mortgage insurance protection(MIP) fund is negative, but that is flawed logic, as there were changes to the HECM program in 2015 that satisfied HUD and the FHA.
WHAT’S THE GOOD NEWS?
I’m glad you asked. If you’re reading this in September, you still may have a chance to sign up for a Reverse Mortgage under the old rules. All you have to do is get counseled and complete an application…then you will be “grandfathered in”. Please don’t let Mortgagee Letter 2017-12 bite you in the rear end…and of course let me know if I can ever help.