Replies to post #10142 on Your Economy (No Politics) (YE1)

[Bullwinkle]

Hi ot, I don't know for sure the answer to that but I would like to research it. I would think if anything it may be counted as a Refi, Mortgage Application or Loan.

[Bullwinkle]

Getting back to the reverse mortgage question, I believe they are considered to be a refi. Now whether or not some back door hedonic numbers game is being played in counting these as an actual sale per se' I cannot say, but I don't think so. Now once the property is actually sold is another story, that would most likely be considered an existing home sale.


FHA Reverse Mortgages (HECMs):

• Section 201(a) of the law permits the streamlined refinancing of current FHA HECM (reverse) mortgages and allows HUD to credit some of the insurance premium paid for the original mortgage to the refinanced mortgage, provided an actuarial study conducted by HUD shows that such crediting of premiums is financially sound. This will allow current HECM borrowers to reduce their refinancing costs and take advantage of the current environment of lower interest rates. In many instances, current HECM borrowers have been reluctant to refinance because they again would be charged the full 2% up-front insurance premium to do so, negating the benefits of a refinance. HUD can now credit some of the unearned premium from the original loan to the refinance loan, thus reducing refinancing costs. This section also requires lenders to provide the HECM borrower with a disclosure statement showing the refinance costs and the amount of additional funds that will be made available to the borrower by the refinance. It also allows the borrower to waive any further counseling for the refinanced loan. The statute requires HUD to draft regulations to implement these changes within 180 days of enactment; however, it is unlikely that HUD can meet such a deadline.

• Section 201(c) provides HUD with the authority to waive any up-front insurance premium on any HECM where all the proceeds are to be used only for the costs of a qualified long-term care insurance contract covering the mortgagors or members of the household residing in the property. Regulations would be needed to implement this change; no deadline for publishing such regulations is set forth in the statute.

• Section 201(d) requires HUD to complete an actuarial study within 180 days of enactment and submit a report to the Committee on Banking and Financial Services of the House of Representatives concerning the feasibility of establishing a single, national loan limit for the HECM program. MBA strongly supports a single, national loan limit for HECMs.

http://www.mbaa.org/wash_update/lib2000/FF1229a.html


Some additional links:

http://www.rtgconsultants.com/reverse-articles/reverse_mortgages.html

http://www.efmoody.com/realestate/reversemortgages.html

http://www.cdhs.state.co.us/agency/AAS016I.pdf#search='do%20reverse%20mortgages%20counted%20as%20a%2....