New HECM Guide Raises Questions, HELOC Use Varies

ReverseFocusReverse Focus Weekly Podcast Episode #337

In this week’s Reverse Focus podcast, Shannon Hicks reviews the new guide for HECM origination, noting that lenders say the new financial assessment mandated for some borrowers presents “a whole new ball game for origination.”

For the borrower credit history review HUD noted it’s not just a credit score, but will help to determine residual income and monthly debts for the borrower and any non-borrowing spouse or household member. 

One major surprise was the previously unmentioned requirement of seasoning for non-HECM leans. 

Hicks also highlights the FHA Insurance Fund, saying when it comes to the HECM portion he observes some “dangerous and disturbing” numbers. 

While the standing of the forward portfolio improved vastly, the Home Equity Conversion Mortgage portfolio showed a sharp downturn and resulting negative capital reserve ratio at -1.2%. Tune in to learn more about the FHA Insurance Fund’s financial footing.

The latest development in ongoing litigation surrounding the reverse mortgage nonborrowing spouse has plaintiffs moving for a renewed class certification, in a class lawsuit filed by the AARP Litigation Foundation on behalf of displaced nonborrowing spouses. 

Finally, the podcast also discusses how borrowers are using their home equity lines of credit (HELOCs).

To listen, login or become a free member to access past and current episodes.

Talking Points:

  • The new guide for HECM Origination: The Financial Assessment
  • The number for HECMs in FHA Insurance Fund
  • Plantiffs move to re-certify in non-borrowing spouse lawsuit
  • Here’s how typical borrowers use their HELOCs

Listen now“Reverse Focus is the ultimate resource for reverse mortgage professionals providing the technology, training and marketing to grow your business. We are your one-stop resource for those committed to taking their business to the next level.”

Editor’s Note: These posts are sponsored by Reverse Focus.

Written by Cassandra Dowell

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