Starting on Nov. 1, the limit on FHA-backed reverse mortgages, dubbed Home Equity Conversion Mortgages (HECMs), will rise to $417,000 nationwide.

The new rules also will institute a 2-percent cap on origination fees for the first $200,000 of the loan amount or a 1-percent ceiling for higher amounts, with a $6,000 inflation-adjustable limit.

Additionally, seniors will be allowed to use such loans to purchase a new property and extract equity from co-operative properties, and lenders will no longer be allowed to sell annuities and other financial products along with the mortgage.

Presently, 99 percent of new reverse mortgages are HECMs.

Written by Realty Times Staff

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