Just when seniors have seen equity pour out of their homes through reduced values, HUD in all their wisdom decides to reduce the principle benefit amount by approximately 10% for all new transactions after Oct. 1st.
This information just came across our desk about 3pm. As it stands now, I am advising anyone thinking of doing a reverse mortgage to get started on their application. Of course, your senior counseling will have to be completed first.
This is a true shock to lenders and analysts are predicting that it will adversly affect about 21% of seniors doing reverse mortgages by having them possible have to bring additional money to the closing table just to pay off their existing mortgage.
My advise = contact your Senators and U.S. Representatives and sound off! I will post details as I get them.
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