Changes to reverse mortgage provisions are being considered by both the House and Senate in coordination with the HUD Secretary. The changes are necessary in order to protect both lender and borrower in light of the depressed real estate market. One of the things being considered is a subsidy, and it is estimated a total of $298 million will be needed to protect any loans made during the fiscal year of 2010. The President already included appropriates for this subsidy in his fiscal Year 2010 budget but it has not been approved by the House and Senate as of yet. These figures are based on the assumption that the current housing market will continue on a downward trend and though OMB supports this theory they are not willing to release their estimates to the public in order to avoid causing any alarm or making premature projections that are based only on theory.

The Congressional budget Committee has agreed there is a need for a subsidy in the amount of $798 million. HUD’s Secretary has commented they are willing to increase insurance premiums and tighten the eligibility requirements in order to finance the subsidy. The House version of the bill does not make any appropriations for the subsidy but rather advises the HUD Secretary to make any changes he feels necessary. The Senate on the other hand includes appropriations for a $288 million subsidy in addition to the potential for reducing current loan limitations by five percent. The Senate will most likely vote on the bill during their current session. This may take a little time since they only recently returned from their summer recess and will need to include this bill on their calendar.

Because of the vast differences between the Senate and House versions of the bill it will probably be necessary for it to go to conference. That doesn’t mean it will be tabled but there may be dramatic changes, possibly even a return to the original appropriation of $798 million the President requested for his fiscal year 2010 budget. It is essential to develop a bill that will be beneficial to not only the lenders but also the elderly borrowers. The subsidy is a necessary addition and requires the development of realistic and workable provisions that will benefit everyone involved.

NRMLA is providing information to key figures in Congress concerning the feasibility of lowering the reverse mortgage limitations. They have conferred with several of their major lenders and have discovered that with limitations being lowered 10%, 21% of borrowers would be unable to borrow enough funds from a reverse mortgage to meet their current indebtedness. This would leave many elderly homeowners faced with having to sell their homes and use the funds in to secure housing elsewhere or move in with relatives. There is a definite need to trim costs but at the same time to not take away from the elderly homeowner who wishes to remain in his home and needs the reverse mortgage to do so.

If you would like more information, please call (866) 683-3690 or complete our online Reverse Mortgage Information.

A thirteen-year veteran of the mortgage industry, Robert Griffin specializes in reverse mortgages and has helped over 3000 Americans find financial security with a reverse mortgage. The owner of Griffin Financial Mortgage LLC, based in Fort Worth, Texas, his memberships include the National Association of Mortgage Brokers (NAMB), the Mortgage Bankers Association (MBA), the National Reverse Mortgage Lenders Association (NMRLA) and the Better Business Bureau (BBB). Robert Griffin is also co-author of “62 Senior Moments.”

Article Source:http://www.articlesbase.com/mortgage-articles/appropriations-act-2010-changes-reverse-mortgages-1291174.html

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