On June 18, the FHA issued new guidelines to Reverse Mortgage lenders regarding truth in advertising. In order to ensure that seniors are fully aware and informed of every aspect of Reverse Mortgage loans, FHA is reminding all lenders that they must “explain in clear, consistent language all requirements and features of the HECM program and may not mislead or otherwise cause a senior borrower to believe that the HECM product contains any features or limitations that are inconsistent with FHA’s requirements.”
What do some of these explanations include?
- Outlining all product features and options available
- That borrowers may change payment methods under an adjustable rate mortgage (ARM)
- ARM's can provide different five payment options
- With fixed-rate Reverse Mortgages, a lump sum payment must be taken at closing
- The limits on disbursement (payment to borrower) in the first year of the loan
- Some guidelines on how the available loan amount is calculated depending on borrower's age(s) and amount of home equity
Interested in a free consultation? I work with you to make your Reverse Mortgage as simple and easy as possible. Give me a call at (510) 610-5223 or send me an e-mail at ed.ramos@fpfmail.com.
