Appropriations Act 2010 Changes Reverse Mortgages

With the current depressed real estate market it is necessary to develop ways to protect both lenders and borrowers. The House, Senate and HUD Secretary are working together in order to come up with a plan that will be feasible for everyone. One of the items being considered is a subsidy, and experts believe a total of $298 million is necessary in order to offset any losses that may occur with loans originated during the fiscal year 2010. The Present has already made accommodations for this in his fiscal year 2010 budget, but it has not yet been approved by the House and Senate. These figures are based on the assumption that the current downward trend in real estate will continue and even though OMB confers with this theory they are not ready to commit to any estimates in order to avoid undue alarm or making projections that are not supported by fact.

The Congressional budget Committee is in agreement with the necessity of a $798 million subsidy and HUD's Secretary is willing to consider increasing insurance premiums and tighten up eligibility requirements in order to meet the budget requirements of the subsidy. The House's version of the bill does not make any provisions for any appropriation for the subsidy though it does advise HUD's Secretary to make any adjustments he feel are needed. In the Senate version there is an appropriation for a $288 million subsidy along with the possibility of decreasing current loan limitations by five percent. They will most likely vote on the bill as soon as they can get it on their calendar after their return from summer recess.

The vast differences that exist between the House and Senate versions of this appropriations bill will probably cause it the need for it to go to conference. This doesn't mean it will be thrown out but it may undergo some major changes before final approval which may even include a subsidy appropriation of $798 million as requested in the Present's original budget for fiscal year 2010. Current economic conditions make it essential for a decision to be made as quickly as possible on this issue.

Amidst all the conflict over the subsidy bill, NRMLA is attempting to maintain the current limitations on reverse mortgages. They are providing information to several key figures in Congress based upon research they have conducted with several of their major lenders. Based on their discussions with lenders they have concluded that 21 percent of current borrowers would not be able to pay their current indebtedness if the maximum limits were lowered even ten percent. This would leave many elderly homeowners unable to live on their own-or at least in their current home. They would have to sell their homes and use the money to buy a home in a less desirable neighborhood, rent an apartment or move in with relatives. This would take away the one thing they have worked all their lives to avoid and put an additional burden on their budget needs. 

A thirteen-year veteran of the mortgage industry, Robert Griffin specializes in reverse mortgages and has helped over 3000 Americans find financial security with a reverse mortgage. The owner of Griffin Financial Mortgage LLC, based in Fort Worth, Texas, his memberships include the National Association of Mortgage Brokers (NAMB), the Mortgage Bankers Association (MBA), the National Reverse Mortgage Lenders Association (NMRLA) and the Better Business Bureau (BBB). Robert Griffin is also co-author of "62 Senior Moments." If you would like more information, please call (866) 683-3690 or complete our online Reverse Mortgage Information 

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