San Diego, CA (PRWEB) August 30, 2013
LoanLove.com is a borrower advice website that provides detailed insights into the mortgage industry in a fun and entertaining way. The team at LoanLove.com 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 trends, the real estate market and the U.S. financial landscape in order to help them obtain a home loan that they will love. A recent article posted on the website takes a look at the reverse mortgage updated guidelines which were recently released.
The Loan Love article says of the new reverse mortgage law which was agreed upon by both republicans and democrats: “Is the weather forecast calling for snow? Sure, it’s summer, but a reverse mortgage law just passed that got the support of both Republicans and Democrats, and in today’s political environment, a law that gets bipartisan support is about as rare as a blizzard in August. OK, all joking aside, the new law – called the Reverse Mortgage Stabilization Act – includes lots of reverse mortgage reforms that make these loans much safer and more appealing to seniors who’d like to tap into their home’s equity.”
The new law puts safeguards in place to ensure that seniors understand what they are getting into with a reverse mortgage and protect them from being taken advantage of, and also to protect lenders from losing their investments. These risks have put reverse mortgages in a negative light in the past, but even then reverse mortgages did have many benefits. The Loan Love article says:
“For most people, 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.”
The new guidelines enable seniors to enjoy these benefits while also ensuring that they are protected from getting into a situation that they are unable to handle. The new reverse mortgage laws would do this by requiring that seniors have a financial assessment before being approved for a loan, thus preventing them taking on a loan that is not right for them; that an escrow account be set up when necessary to prevent defaults by the homeowners; that the amount that the homeowner can withdraw when initially approved would be limited in order to prevent losses that may occur when the entire amount is withdrawn immediately after signing; and lastly the new law would prohibit any changes to the reverse mortgage laws that are not designed to improve the financial safety and reliability of the program.
For more information on the new reverse mortgage guidelines, please visit LoanLove.com for the full article.