Here are some interesting items from the new housing bill that you may not have heard yet….
When reviewing an article on www.BankRate.com, I noticed an article on More Regulations on Reverse Mortgages. A reverse mortgage is an advance against home equity. It’s for homeowners age 62 or older, and the reverse mortgage doesn’t have to be repaid until the borrowers die or move out.
Because reverse mortgages are elderly borrowers, there is concern that dishonest lenders and brokers take advantage of borrowers. Borrowers are required to get counseling first, to learn the pros and cons of reverse mortgages. The law will result in strengthenend qualifications for counselors.
The law limits origination fees on reverse mortgages. They cannot exceed 2 percent of a reverse mortgage of up to $200,000. For a reverse mortgage amount above that, the limit is $4,000, plus 1 percent of the loan amount above $200,000. Origination fees cannot exceed $6,000 in any case. In future years, this upper limit is indexed to inflation.
Thanks to Graham Stiles at www.GrahamStiles.com for sharing this article.