I seem to be always waiting for the next economic shoe to drop and thought I heard it when I read this headline: U.S. Regulator Sounds Alarm About Reverse Mortgages. Luckily, I asked mortgage advisor Jay Reynolds what he thought. Below are his thoughts that put my mind at ease. Jay wrote:
There’s just enough info in that article to be dangerous. And a few inaccuracies.
1. The are no Fannie Mae HECMs anymore.
2. Any time you see the word “sub-prime”, know that the person who wrote it knows less than you do about mortgages.
Basically, proprietary reverse mortgages allow for loans in excess of the $625,500 HUD limit. Which makes sense, if you own a $2 million house. Generally they carry lower loan-to-value ratios anyway, so you have to have a pretty expensive property for them to makes sense in the first place.
There’s some bad info out there. But if you’d like to learn more, I’ve weeded it down to these three articles. The first one is incorrect in that the HUD limit on HECMs is $625,500, not $417,000.
You can contact Jay at 513-348-7712 if you have questions.