The Mortgage Professor: Reverse mortgage program gets a makeover
By Jack Guttentag
The Mortgage Professor (MCT)
Published: Thursday, Oct. 24 2013 12:00 a.m. MDT
Last month, the Federal Housing Administration announced a series of sweeping changes in its reverse mortgage program, most of which have already taken effect. The changes are a response to increasing losses suffered by the FHA in connection with the extensive misuse of the program. A disproportionate number of borrowers were drawing as much cash upfront as they could — 100 percent of the principal limit, which is what the FHA calls the senior’s total borrowing power. This left them no scope for further draws in the future.
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