High-Cost Loan Limit Extension

On September 29, the House and Senate each passed a continuing resolution which includes provisions to extend the current HECM, GSE, and FHA loan limits for high-cost areas through September 30, 2011.  The loan limit caps are currently set to expire at the end of this year.  President Obama signed the continuing resolution on September 30. Continuing Resolution. Summary of Continuing Resolution.

HUD Announces New Reverse Mortgage Option

On September 22, the FHA announced that a modified version of its Home Equity Conversion Mortgage product will be available as of October 4. The option, known as HECM Saver, will allow homeowners who want to borrow a smaller amount than what would be available with an original HECM Standard to pay lower upfront closing costs. The mortgage insurance premium for both the HECM Saver and HECM Standard will be charged monthly at an annual rate of 1.25% of the outstanding loan balance, increased from 0.50% in effect for current HECM Standards. In addition, the amount of HECM loan proceeds available to both HECM Saver and HECM Standard borrowers will be reduced. HUD Release.