Mortgage

Here are the top 10 reverse mortgage stories of 2018

A recap of the news that caught your attention this year

It’s been an eventful year in the reverse mortgage industry. The HECM space saw the much-anticipated proprietary market bloom with the advent of six new non-agency products. The Federal Housing Administration announced a new mandate requiring a second appraisal on select HECM loans. And the industry watched endorsement volume plummet as the market struggled to adjust to new guidelines.

We drilled down on our article stats to find out what reverse mortgage stories got the most attention this year, shedding light on the topics our audience found most interesting in 2018. Here’s what we found:

Former head of FHA and MBA David Stevens blasts reverse mortgages
Suggests fixes to curtail "outrageous profits" and "predatory sales approach"
David Stevens isn’t a fan of reverse mortgages, and he’s not afraid to say it. The former FHA commissioner and recently retired president and CEO of the MBA posted a comment about HECMs on LinkedIn that got people talking. "Brian Montgomery is trying to fix the abuse," he said, "but the product is the one that kept me awake at night when I was there." We reached out to Stevens to talk more about his issues with the program and his suggestions for fixing them.

Finance of America Reverse introduces first-ever second-lien reverse mortgage
HomeSafe Second lets borrowers tap equity, keep their mortgage
Finance of America Reverse released a new version of its proprietary reverse mortgage product, unveiling the HomeSafe Second – the first jumbo reverse mortgage to allow homeowners to retain an existing mortgage lien. The move is the next phase of FAR’s strategy to provide homeowners with more ways to tap their equity and help reverse mortgages seep into the mainstream.

Reverse mortgage volume falls to 13-year low
Despite record levels of tappable home equity, program changes have squashed volume
Reverse mortgage endorsements have dropped 15.5% in June from the previous month, hitting a low the industry hasn’t seen since 2005. To help turn things around, lenders in the space are working to innovate, creating private equity release products that might provide an answer to the industry’s problems.

Big changes at CIT: Exits reverse mortgage and servicing businesses
Completes sale of Financial Freedom
CIT Group, the parent company of CIT Bank, OneWest Bank, and Financial Freedom, announced Tuesday that it completed the previously announced sale of reverse mortgage company Financial Freedom to an unknown buyer. But that wasn’t the only piece of news that CIT dropped on Tuesday.

Why reverse mortgages still matter
Volume is in a slump, but players insist demographics are on their side
Over the years, reverse mortgages have suffered reputation issues, battled inaccurate news coverage and adjusted (again and again and again) to new regulations. Yet, the industry persists. Talk to any reverse professional and they'll tell you why: It’s the demographics, and the numbers don’t lie.

FHA raises reverse mortgage loan limits
Brings limit up to 726,525 in 2019
The Federal Housing Administration has increased the maximum claim amount for reverse mortgages for the third consecutive year, announcing Friday that it will raise HECM claim amounts to $726,525 in 2019. What does this mean for the HECM?

FHA to require second appraisal on select reverse mortgages
Aims to combat inflated valuations, reduce MMI Fund risk
The Federal Housing Administration announced Friday that it will require reverse mortgage lenders to provide a second property appraisal on loans flagged by FHA as potentially having an inflated property valuation. The agency said the move is intended to reduce risk to the Mutual Mortgage Insurance Fund, which will ultimately ensure the long-term sustainability of the program.

Who uses a reverse mortgage to purchase a house?
No one, really, even though it could be a retirement gamechanger
A little-known reverse mortgage product lets older homebuyers use their equity to purchase a house. It could help older adults free up cash at a time in life when liquidity is especially important. Too bad no one's really heard of it.

Here are the top 10 reverse mortgage lenders
And these are the different approaches they’re taking to survive the down market
The reverse mortgage industry has taken a bit of a beating in the past year following significant program changes from HUD, but HECM lenders are nothing if not resilient. We’ve compiled a list of the top 10 players in the space and a summary of the approach each has taken to stay afloat in the current climate.

Reverse mortgage lender AAG expanding into traditional mortgage lending
Plans growth throughout 2018
American Advisors Group is one of the nation’s largest reverse mortgage lenders, but now, the company is expanding into traditional forward mortgage lending as well. According to AAG, it began piloting forward lending in 2017, and the company is now ready to roll out forward mortgages on a large scale.

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