Reverse Focus Weekly Podcast Episode #263
In this week’s Reverse Focus podcast, Shannon Hicks discusses interest rates may rise but not as soon as some would expect, as the Federal Reserve is winding down purchasing of bonds in its effort toward economic stimulus. The bank could begin reducing its pace of ongoing bonds purchases as soon as this year, according to Chairman Ben Benanke, however, the change is contingent upon meeting certain economic thresholds and conditions.
Reverse mortgages can be used as an insurance policy of sorts under the Home Equity Conversion Mortgage Saver program, according to financial planning expert Harold Evenksy, who sees reverse mortgages as risk management or insurance against a volatile market.
Also discussed, the new language of non-recourse is here for counselors and lenders of reverse mortgages. The Department of Housing and Urban Development (HUD) is updating its handbook to say that reverse mortgages are non-recourse, meaning that a borrower, his or her heirs, or estate will only be responsible for repaying 95% of home’s appraised value rather than the loan balance, if that balance is greater than the home’s worth at the time of the sale.
Lastly, Rrecent data from HUD shows reverse mortgage applications for April and May are well-below their pre-April 1 levels, following the moratorium on the Standard fixed-rate product. Some are speculating if this is a downturn or the start of a new trend, considering the product shift to 95% being adjustable rate mortgages.
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Talking Points:
- Why interest rates may rise
- Reverse mortgages as an insurance policy
- The new language of non-recourse
- Reverse mortgage apps signaling a temporary downturn, or a new trend?
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Editor’s Note: These posts are sponsored by Reverse Focus.
