HUD tightens requirements for reverse mortgages
Concerned about financial losses in a federally insured mortgage program for seniors, the Department of Housing and Urban Development on Tuesday announced plans to adjust premiums and limit financial draws for elderly homeowners taking such loans. HUD officials said the economic value of the federal reverse-mortgage program, estimated at negative-$7.7 billion last year, is putting at risk the Federal Housing Administration’s entire insurance fund that supports all single-family loan programs, including traditional mortgages. The federal reverse-mortgage program, officially called a home equity conversion mortgage (HECM), has been marked by problems, including a rise in foreclosures, as reported Sunday in The Washington Post. On Tuesday, HUD officials said that if quick fixes aren’t made, the program will require an appropriation from Congress to ensure that the entire insurance fund maintains required reserves.