Reverse Mortgage Updated Guidelines – A New Article Highlights The Recent Changes To Home Equity Conversion Mortgages

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A new guide from Loan Love discusses the changes made in the recent reverse mortgage reform. is a borrower advice website that provides detailed insights into the mortgage industry in a fun and entertaining way. The team at is devoted to help empower both first time and experienced homeowners with valuable resources, first-class knowledge and connections to top-rated industry professionals and has the mission of helping consumers and borrowers to obtain the latest information on mortgage lending news, the real estate market and the U.S. financial landscape in order to help them obtain a home loan that they will love. In helping home owners stay on top of mortgage trends, LoanLove has presented a new article highlighting the recent changes made to Home Equity Conversion Mortgages. Using these new Loan Love reverse mortgage updated guidelines, senior home owners can resolve the many questions they may have when dealing with a reverse mortgage.

The Loan Love guide begins by helping loan borrowers get acquainted with a new bill being passed from the U.S. Congress named the “Reverse Mortgage Stabilization Act”. This new law was made in retrospect to the previous reverse mortgage process that left senior homeowners confused from the lack of information regarding reverse mortgages and home equity. As the article states:

“The only way to make use of the equity you’ve built up in your home is by selling or refinancing and pulling equity out at closing. A reverse mortgage (you may know it by its more formal name – Home Equity Conversion Mortgage or HECM) lets people who are at least 62 years old access that equity using an entirely different approach: Homeowners can take money out of their homes without having to make any monthly payments. What’s more, the homeowner keeps the title to their home for the entire time they’re living in it.”

A borrower taking on a HECM product may be facing difficulty in paying off the loan, as these loans can be complex. This is furthered by the potential risks of homeowners facing unethical lending practices with these types of loans. Fortunately, the Reverse Mortgage Stabilization Act was made to help secure the financial interests of loan borrowers and lenders. The article continues by listing all the major reverse mortgage updates.

One of the newly implemented rules the reverse mortgage law now obliges is for loan borrowers to have a financial assessment before loan approval. This is to determine if a HECM loan is appropriate for a home owner’s needs while ruling out inappropriate loan products. This also protects the lender, too. By promoting more reasonable loans, loan borrowers can be more relied on to satisfy a lender’s requirements when a loan is written.

“Second, when necessary, the law requires an escrow account be established to prevent defaults that can occur when a homeowner falls behind in paying homeowner’s insurance or property tax bills. This step protects lenders from losing their investment in homes when homeowners can’t pay these bills or simply refuse to” further states the article.

A third way the reverse mortgage process is being preserved is by putting a money withdrawing cap on loans initially approved for loan borrowers. This allows only enough to pay for payments considered “mandatory obligations” (mortgage liens, closing costs, etc.) while protecting the funding that goes into a loan. This prevents losses what may occur if a loan borrower decides to withdraw the entirety of a loan amount.

Finally, the article points out that by law any changes made to the new reverse mortgage system can only be made if it will improve the system’s overall reliability and safety. In an official statement by Congressman Mike Fitzpatrick concerning the Reverse Mortgage Stabilization Act: “By signing this bipartisan bill into law today, the law now respects that desire while at the same time enacting safeguards for both lenders and seniors. Republicans and Democrats worked together to get something done in Washington.”

For more information on the reverse mortgage updated guidelines, please visit

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Kevin Blue
Loan Love
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