August 2, 2013
A recent article published by American Banker observes that lawmakers in Washington D.C. have passed legislation authorizing the FHA and HUD to make changes to the FHA Home Equity Conversion Mortgage program, also known as FHA HECM.
The changes have not yet been signed into law by President Obama. But according to the Reverse Mortgage Stabilization Act passed by the House in June 2013 and now by the Senate in July 2013, “the agency can make certain changes by mortgagee letter, such as requiring financial assessments of a borrower’s budget and limiting the amount borrowers can take out as a lump sum up front” according to the American Banker article, titled Congress Passes Narrow Bill to Fix Reverse Mortgages at FHA.
“Carol Galante, the agency’s commissioner, implored lawmakers on the Senate Banking Committee to take up the legislation quickly at a hearing last week”, the article adds.
It also quotes one lawmaker, Representative Danny Heck (D-Wash) saying, “Thanks to bipartisan efforts in both chambers, the FHA can now act quickly to make necessary and common sense reforms to the federal reverse mortgage program,”
Heck introduced the FHA HECM legislation in May of 2013.
The FHA is expected to announce the substance of these changes in a forthcoming FHA mortgagee letter. We’ll report on that mortgagee letter when it becomes available. It will most likely be issued after the president has signed the bill into law.
Do you have questions about FHA loans, refinance loans, or reverse mortgages? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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