Volumes and Margins to Take A Hit New Reverse Mortgage Rules
Times are changing for the reverse mortgage world. With a new set of rules reverse mortgages could be feeling the squeeze as early as next month.
"The short-term effect could be the same as when the Department of Housing and Urban Development instituted Financial Assessment rules or made principal limit factor (PLF) changes in the past, according to Reverse Market Insight president and founder John Lunde — meaning a drop of 25%," according to Reverse Mortgage Daily.
Though, Lunde also told Reverse Mortgage Daily that he fears the drop could be more towards 50% due to the "reduction in the expected rate floor in calculating PLFs." The competitive rates will certainly hike up generating general competition among lenders.
For more on the new rules and how fast they can begin affecting reverse mortgage lending, click on the image above.
