SAN DIEGO, Aug. 29, 2013 /PRNewswire-iReach/ -- 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 most recent 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. Loan Love now provides the latest in mortgage industry with a newly released article delving into the changes of the reverse mortgage loaning process. The new Loan Love article takes a look at the recently approved Reverse Mortgage Stabilization Act and how it will affect older homeowners.
The Loan Love article says: "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."
"To recap: 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."
However, reverse mortgage home loans have not been with out their draw backs in the past. The main problem that worried many was the fact that the loan process can be very complex, and older homeowners may not fully grasp what they are taking on when they apply for this type of loan. This also left older homeowners vulnerable to getting taken advantage of by unscrupulous lenders, or even just suffering from being misinformed by unknowledgeable lenders. The new litigation strives to put a stop to this and other problems faced by those who are searching for reverse mortgages.
The new 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.
The Loan Love article says: "After the bill was signed into law, the bill's Republican sponsor Congressman Mike Fitzpatrick said, "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 Stabilization Act, please visit LoanLove.com.
Media Contact: Kevin Blue, LoanLove.com, 949-292-8401, firstname.lastname@example.org
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