Mortgage professionals in the reverse mortgage industry are trying to wrap their heads around new rules that are effecting reverse mortgage insurance premiums and principal limits.
There are also more effects to come as these rules will take effect on October 2. In the meantime some of the immediate effects have been highlighted and they are pretty alarming.
"The expected rate 'floor' at 5.06% has collapsed, with every one-eighth of a percent difference in expected rate influencing the principal limit all the way down to 3%," according to Reverse Mortgage Daily.
"This will likely require lenders to lower their margins in order to achieve higher principal limits, according to Dan Hultquist, director of learning and development at ReverseVision."
Lenders will now have to bend their margins much more than they did in the past. That's not all folks, there a couple more key effects that you can explore deeper by clicking on the image above.