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Show SOUTHERN UTAH NEWS WEDNESDAY Community New housing law to benefit senior homeowners MAY 9, 2001 New legislation was recently passed that will have a great impact on senior homeowners with respect to the reverse mortgage industry. Shortly before of credit (line of credit option not available in Texas), or a combination of these options. Monthly installments can be received for as long as the borrower lives in leaving office, Former President the home or for a fixed period. Bill Clinton signed into law a There is no repayment rebill federal housing that makes quired of any kind until the home certain changes to the federal is sold or the borrowers) permareverse mortgage program. nently move from the residence. This new law, called the Several independent agencies provide free information qualifications required when are three reverse mortgage pro- on the reverse mortgage: qualifying for this loan. The pro- grams available; the FHA Insured AARP ceeds can be used in any manner Home Equity Conversion Mort- www.aarp.orgrevmort or the the borrower wishes but are most gage, or HECM, theFannie Mae NRMLA (202) 939-176- 0 often used to make home repairs Home Keeper reverse mortgage and www.reversemortgage.org or supplement income. jumbo reverse mortgages available and Fannie Maes Office of According to statistics collected from Financial Freedom Senior Public Information at To increase senior access to the reverse mortgage loans have been loan, there is not income or credit originated to date. Currently there 800-209-80- by the industry, more than 50,000 85 Funding Corporation ofTrvine, CA. American Homeownership and Economic Opportunity Act, provides senior homeowners the opportunity to utilize a greater portion of their reverse mortgage proceeds when purchasing Long-TerCare Insurance or when refinancing their existing reverse mortgage. In the near future, HUD will be releasing clarifications as to how all reverse mortgage lenders should carry out the wording of this new legislation. The new law specifically states that reverse mortgage borrowers will now have the option to waive the premiums that are paid for Mortgage Insurance if the loan proceeds are used to purchase qualified Long-Term up-fro- nt m Care insurance plans. During the sale of the property, if the home value is lower than the amount owed, the Mortgage Insurance Premium, or MIP, which is charged by the FHA, is used to offset any difference in values thus protecting both the borrower and the lender. With the recent drop in interest rates, and higher reverse mortgage loan limits, current reverse mortgage borrowers may find an even greater incentive to look into a reverse mortgage. When refinancing, current reverse mortgage borrowers will have the opportunity to take advantage of the previously described MIP waiver, yielding even higher monetary results than before. The legislation also waives the required third party counseling when refinancing if the homeowner has received counseling within the last five years. This free counseling session is required of all new reverse mortgage borrowers. In addition HUD will also estab- to help homeowners determine whether or not a refinance is the right option for their situation. Reverse mortgages are considered a versatile retirement planning tool that empowers seniors to have greater control over their current financial situation, and their lives. Senior homeowners who are at least 62 years of age can qualify for this lish procedures program. It is a loan that is primarily based upon the age of the borrower(s), home and value and current interest rates. Proceeds are paid either as a lump sum, received in monthly installments, placed into a line tin fliirnillifi VfliM rtftaifi IBEI! mm vii 31SIIS tuvnf Milt Will! uuw iipnttlte IRlHftrtfc Wtlft5lHMU |