Page 6 - AAG Wholesale Booklet
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The Safe and Steady
March of Progress
2008 TAKING ACTION: The SAFE Act requires
states to implement uniform procedures when
licensing and registering HECM loan originators.
The Housing and Economic Recovery Act estab-
Many Years of Constant lishes more consumer safeguards, such as a limit
Improvements on origination fees, rules against cross-selling, and
guidelines for counseling independence.
Over the years, the HECM loan has been improved
and strengthened through the united efforts of 2009 THE HECM FOR PUR-
many different parties including HUD, the FHA, CHASE: The HECM for Pur-
the Federal Trade Commission, the National chase is introduced, allowing
Reverse Mortgage Loan Association (created borrowers to purchase a new
in 1997), senior advocacy groups such as the home using a HECM loan. This
new option now provides se-
American Association of Retired Persons (AARP) niors with the choice of aging
and the National Council on Aging (NCOA), and in place in their current home
the now scores of private lenders they work with or aging in place in a new
to ensure that the HECM is a safe and sustainable home. *
loan for seniors who want to responsibly access *The right to remain in the home is contingent on
some of their home equity for retirement.
paying property taxes and homeowner’s insur-
ance, and complying with the loan terms.
New protections continue to ensure the integrity
and mission of the HECM program to help
seniors unlock a portion of their home equity so 2010 THE RESULTS: Research conducted by
they have the cash they need for a more secure Marttila Strategies for NRMLA reports that 90% of
retirement. surveyed borrowers felt no pressure to proceed,
90% did not feel they were misled in any way or
given wrong information, 80% said they were like-
The largest of these safeguards began rolling out ly to recommend the product to a family member,
about a decade ago, which was perfect timing, and more than 50% said they could not meet their
considering the first wave of baby boomers in monthly expenses without their HECM.
2008 were turning 62 — the age when someone
can first apply and qualify
for a reverse mortgage. 2013 NEW POLICIES: HUD releases new HECM
policies creating more consumer and product safe-
guards, including placing a limit on the amount of
equity borrowers can access their first year.
2014 NON-BORROWING SPOUSE PROTEC-
TIONS HUD: Implements comprehensive new
safeguards for non-borrowing spouses. To
remain in the home after the HECM borrower
dies, the non-borrowing spouse must meet
certain conditions, such as showing proof of
marriage status at the time the loan was tak-
en out, proving legal ownership, and comply-
ing with all existing loan terms.
Be er Together
