Reverse Mortgage Reform - Discusses Recent Changes To Home Equity Conversion Mortgages In A New Guide

SAN DIEGO, Aug. 25, 2013 /PRNewswire-iReach/ -- 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 understanding the recent reverse mortgage reform, Loan Love has now provided a new guideline to using reverse mortgages today with a brand new article. The new article, titled "Reverse Mortgage Reform 2013 (Updated Guidelines)", covers much on the changes of the new reverse mortgage law and how these changes can help senior home owners in making use of their home equity.

The article begins by discussing the new joint agreement made between Republicans and Democrats on a new law called the "Reverse Mortgage Stabilization Act", a law that is devised to help secure the interests of a elderly homeowners making use of their Home Equity Conversion Mortgage, or HECM for short. But what exactly is a HECM? The Loan Love article explains:

"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."

But while the advantages may seem obvious at first, there can be a few drawbacks to using reverse mortgage loans, mainly a consumer's misunderstanding to how the loan works. The Reverse Mortgage Stabilization Act serves as a countermeasure to the potential pitfalls in reverse mortgages while protecting the interests of loan borrowers and lenders alike. First, as the article points out, is that every loan borrower is now required to take a financial assessment before being recommended any HECM products, if suitable. This helps prevent the signing of inappropriate loans to home owners while setting realistic loan requirements for lenders.

Second, the new law bill now has loan borrowers make use of an escrow account during the loan lending process. As the article states: "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."

One more way the new law also limits how much homeowners can withdraw with each loan. This monetary cap has been implemented to allowing only enough cash for payments considered "mandatory obligations", such as mortgage liens or closing costs. This is to prevent a loan borrower from withdrawing the entirety of a loan upon the signing of a loan agreement. This will help loan borrowers from digging themselves in a financial hole while securing the loan fund of a lender.

Finally, the Reverse Mortgage Stabilization Act prevents changes from being made to the mortgage loan lending process unless the changes will improve the safety and accountability of the system. Knowing these new guidelines, senior homeowners can confidently take advantage of their home's equity through reverse mortgages. To learn more about HECMs and the Reverse Mortgage Stabilization Act, please visit 

Media Contact: Kevin Blue,, 949-292-8401,

News distributed by PR Newswire iReach:




Restaurants, Banking & Financial Services, Residential Real Estate, Financing Agreements, New Products & Services, Real Estate Transactions

Need Help