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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 establishes more
Many Years of Constant consumer safeguards, such as a limit on
origination fees, rules against cross-selling,
Improvements 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 PURCHASE:
The HECM for Purchase is introduced,
many different parties including HUD, the FHA, the allowing borrowers to purchase a new
Federal Trade Commission, the National Reverse home using a HECM loan. This new
Mortgage Loan Association (created in 1997), option now provides seniors with
senior advocacy groups such as the American the choice of aging in place in their
Association of Retired Persons (AARP) and the current home or aging in place in a
National Council on Aging (NCOA), and the now new home.
scores of private lenders they work with to ensure
that the HECM is a safe and sustainable loan for
seniors who want to responsibly access some of 2010 THE RESULTS: Research conducted
by Marttila Strategies for NRMLA reports that
their home equity for retirement.
90% of surveyed borrowers felt no pressure to
proceed, 90% did not feel they were misled in
New protections continue to ensure the integrity any way or given wrong information, 80% said
and mission of the HECM program to help they were likely to recommend the product
seniors unlock a portion of their home equity so to a family member, and more than 50% said
they have the cash they need for a more secure they could not meet their monthly expenses
retirement. without their HECM.
The largest of these safeguards 2013 NEW POLICIES: HUD releases new
began rolling out about a HECM policies creating more consumer and
decade ago, which was perfect product safeguards, including placing a limit
timing, considering the first on the amount of equity borrowers can access
wave of baby boomers in their first year.
2008 were turning 62 — the
age when someone can first
apply and qualify for a reverse 2014 NON-BORROWING SPOUSE
mortgage. PROTECTIONS HUD: Implements
comprehensive new safeguards for non-
borrowing spouses. To remain in the
home after the HECM borrower dies, the
nonborrowing spouse must meet certain
conditions, such as showing proof of
marriage status at the time the loan was
taken out, proving legal ownership, and
complying with all existing loan terms.
