One of the best ways to get up-to-date information is to follow a reverse mortgage blog. While not every blog is created equal, many are written by experienced specialists currently working in the industry. Following a reverse mortgage blog will help seniors get the latest information on different loan products, important changes, and predictions regarding the future of these loans.
Reverse Mortgage Blog Hot Topics: New Credit and Income Requirements for 2012
For those following a blog, this might be old news; but in 2012, the Department of Housing and Urban Development (HUD) is expected to release new underwriting guidelines. Up until recently, lenders approved applications based on age, home value, equity, and property type. In an attempt to reduce the number of seniors defaulting on their loans, lenders will soon be forced to also consider applicants' credit history and income. Unless a borrower is likely to keep up with their homeowners insurance, home repairs, and property taxes, lenders might be forced to turn the applicant away.
Both reverse mortgage blog owners and readers are curious to see what HUD's new guidelines will entail. Strict underwriting guidelines might make it difficult for some seniors to qualify for these loans in the future. While most experts are expecting these guidelines to be fairly lenient, it is impossible predict exactly what HUD will decide.
Reverse Mortgage Predictions for the New Year
In addition to HUD's stricter underwriting guidelines, the Federal Housing Administration (FHA) might be forced to raise mortgage insurance premiums. Due to the declining housing market, the FHA's Mutual Mortgage Insurance (MMI) Fund has taken a hit. To compensate, FHA might be forced to raise HECM mortgage insurance premiums, which were previously increased from 0.5% to 1.25% in 2010. Fortunately, at this time, FHA has no definite intentions to increase premiums. The fund is believed to increase by 2014, which should negate the need for higher premiums if all goes to plan.
While some reverse mortgage blog owners have been focusing on negative predictions, 2012 will bring several positive changes. HUD has extended the maximum claim limits through 2012 and increased funding for financial counseling. Seniors who own homes valued at $625,500 will still be able to take full advantage of their equity in 2012.
Reverse mortgage counseling, which has been low on funding in the past year, will get a $4 million boost in 2012. Regardless of the anticipated changes to loan underwriting, these two changes prove HUD's faith in the longevity of their HECM program. In fact, according to Shaun Donovan, the current secretary of HUD, the HECM program is in a stronger position due to the recent changes.
Compared to traditional mortgage loans, reverse mortgages are fairly new. As these loans continue to remain popular among seniors, it is likely that HUD will continue to develop and improve their reverse mortgage programs. To find out what happens in the new year, seniors can keep following their favorite reverse mortgage blog for current information.