The New Reverse Mortgage working as advertised

HUD Says New Reverse Mortgage Updates Are Good For Everyone

When was the last time you heard about a government loan program that worked as advertised?

New Reverse Mortgage

The FHA Home Equity Conversion Mortgage has come under a great deal of criticism since its inception in 1989. Some of the criticism was justified, some not so much.

The goal of the reverse mortgage program has always been to help America’s aging population use their most valuable asset to help fund a retirement that was likely to last 25-30 years.

Since 1989 HUD has made a number of improvements to the program with one goal in mind: Protect America’s seniors.

According to a new report that was issued by the Department of Housing and Urban development (HUD), the newest reverse mortgage updates on the rules and laws have worked out for the better and to the positive benefit of both borrowers and lenders.

The changes to the HUD Home Equity Conversion Mortgage (HECM) were designed to reduce senior homeowner risk by:

  1. Assure that foreclosures and defaults were reduced.
  2. Prevent lender abuse
  3. Assure that homeowners can afford the taxes, insurance and upkeep on their home
  4. Protect non-borrowing spouses

Related: Want to stay at home? Use your home

“We are very pleased,” commented Karin Hill, senior policy advisor for HUD’s Office of Single Family Housing. “[The market] has stayed very stable and the changes resulted in the outcome we had hoped for.”

Related: California seniors in line for property tax relief

It appears that the new generation of Reverse Mortgage borrowers are being financially prudent when it comes to accessing their tax free source of funds. HUD noted that from 2015 to 2016 borrowers drew as much as 60% less than 63% of the time. This lesser draw means reduced risk to both lenders and borrowers, and assures that, in most cases, there’s something to be passed on to heirs from the estate at a later time.

Related: Choosing the right reverse mortgage lender

So what does reverse mortgage loan performance mean to you?

Better loan performance increases the likelihood of lower interest rates and greater equity access for future Reverse Mortgage borrowers.

“This has had a very positive impact on the risk profile [reverse mortgages],” Hill added.

How do I know if a Reverse Mortgage is right for me?

If you’re still wondering if a Reverse Mortgage is the right solution for you but you’re not ready to sit down with one of our Reverse Mortgage Experts, then we’ll be happy to mail (or email) you Use Your Home to Stay at Home which is the official federally approved consumer booklet for those considering a reverse mortgage.

Some of this information first appeared on

From the desk of Greg Cook; 951.265.4532​