Financial Assessment Delayed and Non Borrowing Spouses are Safer

excitingSome exciting news lately in the world of reverse mortgages. The long awaited financial assessment has been delayed. The assessment which will make even reverse clients have to qualify based on credit, income etc. was set to be in place by March 2nd 2015 has since been put on hold. HUD has said it is taking longer to implement the internal structure needed for the FA than planned. They have not released an official new implementation date but industry estimates are anywhere from 30 to 60 days. This is good news for those customers who would no longer qualify under the new financial assessment guidelines. Previously customers who were over 62, owned and occupied their home and had a good equity position were qualified for a reverse. With the FA borrowers will need to illustrate that they have had a good credit history that shows a “willingness to pay” and that after paying all monthly expenses they still have a certain amount left over monthly. Clients who don’t meet that criteria will be subject to things like set asides to pay for taxes and insurance. These set asides cut way down the money you can get and in some cases make the numbers bad enough to not qualify at all. If you’re not sure if the FA will have a negative effect on your eligibility and what to find out, call today before the FA is put in place.

And…

 Reverse Mortgage Non Borrowing Spouses Are Safer

Other news involves more safety measures for non-borrowing spouses and these are retroactive. FHA has put in place immediately a new rule that allows for the mortgagee (lender) on a reverse where the borrowing spouse has passed away to allow the non-borrowing spouse to stay in the home for the rest of their lives by turning the loan over to FHA.

This is called a MOE (Mortgage Optional Election Assignment).

A MOE allows the mortgagee to assign a loan to FHA that would not normally be. This is great news for those non-borrowing spouses who took the loan out prior to the rules put in place in August 2014 that protect the non-borrowing spouse and base the loan amount on their age. Since lawsuits by organizations like AARP had surfaced FHA had been working on ways to better protect non-borrowing spouses. For more info on this or anything else reverse related please call me today at either: (760) 845-5369 or toll free at 1.800.598.6265!