The Department of Housing and Urban Development (HUD) has announced a new set of regulations surrounding reverse mortgages. The new guidelines are designed to further protect borrowers from any potential risks.
One of the new rules will have lenders provide a breakdown of the details of a reverse mortgage in straightforward language while also requiring borrowers to attend credit counseling.
Additionally, HUD is developing a new program called "Cash for Keys" in which borrowers may recuse themselves from a reverse mortgage. This will help seniors or their heirs who wish to sell their home and greatly reduce the chances of foreclosure and prevent evictions. However, some experts predict the new regulations will create hurdles that will result in a drop in applications for reverse mortgages.
Reverse mortgages are intended for seniors 62 or older as a way to use the equity in their home to eliminate mortgage payments and receive extra funds in the form of a lump sum, line of credit or monthly payments.
Today, conventional conforming no-point 30-year fixed mortgage rates average 3.625 percent while the 15-year rate is near 2.875 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.