HECMs Stuck in Reverse. HUD Considers “Two Product” Solution
ByPosted To: Voice of Housing
Hoping to avoid another era of unscrupulous lending to unqualified borrowers, lawmakers and consumer advocacy groups have expressed concerns that the country's elderly population may become the next target for mortgage scams disguised in the form of reverse mortgages, which in FHA parlance are known as Home Equity Conversion Mortgages (HECMs). While stories of scams and shakedowns receive a considerable amount of media attention, the vast majority of seniors happily holding HECMs are ignored. A 2006 survey on reverse mortgages by the AARP Public Policy Institute showed that 93% of respondents said their reverse mortgage had a mostly positive effect on their lives while only 3% said it was mostly negative. The same 2006 AARP Study showed that “loan costs were too high” and that…(read more)