More Reverse Mortgages Require Second Appraisal

New data from the National Reverse Mortgage Lenders Association shows 25 percent of reverse mortgages require a second appraisal. It’s the result of a new rule implemented 18 months ago designed to stabilize the home equity conversion mortgage (HECM) program within the Mutual Mortgage Insurance (MMI) fund.

According to a Reverse Mortgage Daily article, the number of properties requiring a second appraisal increased about 6 percent from initial findings. Steve Irwin, executive vice president of the National Reverse Mortgage Lenders Association (NRMLA) said, “When this was a more manual process, we saw 19 percent of cases requiring a second appraisal. Our most recent analysis puts the current figure at 25 percent of cases requiring a second appraisal.”

The larger reverse mortgage industry, according to the article, is starting to come to more of a realization about properties that have a generally higher likelihood of encountering the requirement of a second appraisal. The possibilty for rural homes to be hit with a second appraisal is higher because of the more scattered nature of those markets that tighten the availability of enough comparables within proximity to the affected properties, Irwin told Reverse Mortgage Daily.