What Challenges Still Remain for HECMs?
To say the HECM sector has gone through some changes would be a drastic understatement. Just recently, the sector featured changes that included a reduction run lending limits, as well as amendments to ongoing insurance premiums, according to a recent report.
These changes have marked some improvements for HECMs though, there are still some hurdles to overcome due to these new changes and rules.
"Some say it’s unclear whether HUD will allow an appraisal to be ordered until a certificate of occupancy is issued. H4P proponents argue that an appraisal should be allowed based on the plans and specifications; a final inspection would then complete the process.," according to Reverse Mortgage Daily.
"Others are not so sure about the explosive potential of H4P under current market conditions. Michael Banner, a longtime H4P proponent and owner of Florida brokerage firm Professional Mortgage Alliance, says that while the changes are great, the product isn’t going to advance until the industry can get Realtors on board."
Meanwhile, these changes seem to have helped reverse mortgage borrowers in terms of retaining more equity. It's also revealed that builders are expressing more interest with the CO requirement removed.
To learn more about the road ahead for HECMs, click on the image above.
