The Expanded Home Ownership Act of 2007 H.R. 1852 was introduced by Maxine Waters and Barney Frank on March 29th. If passed relatively intact it could make some interesting changes to the HECM program. Along with other changes the bill proposes allowing a HECM to be used to fund the purchase of a new primary residence (1-4 Family Dwelling). Currently, the Fannie Mae Homekeeper™ program enables the borrower to purchase a new primary residence but the product has never taken off quite like the HECM in recent years. The bill also proposes a study regarding mortgage insurance premiums in which they would analyze and determine:
(1) the effects of reducing the amounts of such premiums from the amounts charged as of the date of the enactment of this Act on–
(A) costs to mortgagors; and(B) the financial soundness of the program; and
(2) the feasibility and effectiveness of exempting, from all the requirements under the program regarding payment of mortgage insurance premiums (including both up-front or annual mortgage insurance premiums under section 203(c)(2) of such Act), any mortgage insured under the program under which part or all of the amount of future payments made to the homeowner are used for costs of a long-term care insurance contract covering the mortgagor or members of the household residing in the mortgaged property.
While no one knows if this bill will pass, it’s good to see people making an effort to improve the HECM product. If you would like to see more details of the bill click the link below: