Reverse Mortgage Updated Guidelines - A New Loan Love Article To Understanding HECM Loans Today

SAN DIEGO, Aug. 26, 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. Their newest article, "Reverse Mortgage Reform 2013 (Updated HECM Guidelines)" discusses the new changes made with a recently passed reverse mortgage bill from Congress. These reverse mortgage updated guidelines discuss not only how the new law changes the reverse mortgage process, but how it will protect senior homeowners in the future.

The Loan Love article begins by discussing the sudden changes to how reverse mortgages will operate due to a bill, titled the "

Reverse Mortgage Stabilization Act

" being passed. "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" stated U.S. Congressman Mike Fitzpatrick.

That being said, these reverse mortgage updates is designed to make reverse mortgages more manageable for loan borrowers and lenders in the future. Home Equity Conversion Mortgages (HECM) or reverse mortgages, in other words now operate differently for home owners over the age of 62 trying to avail on their home's equity. The Reverse Mortgage Stabilization Act now requires loan borrowers to follow a set of rules before loan approval. As the article explains, the four new main rules are summed up as the following:

  • "First, the law requires borrowers have a financial assessment before being approved for a loan to determine which HECM products – if any – are most appropriate for their needs so homeowners don't end up taking on a loan that's not right for them. This protects consumers from unscrupulous or unknowledgeable lenders who may promote loans that don't meet the homeowner's needs, and it also protects lenders by making sure the loans they write satisfy their lending requirements.
  • 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.
  • Third, the law limits the amount homeowners can draw when the loan is initially approved, only allowing the amount needed to pay "mandatory obligations" such as closing costs and mortgage liens. The goal here is to protect the fund that oversees reverse mortgages from losses that can occur when the entire amount of the loan is drawn out immediately after signing the loan agreement.
  • And finally, the new law requires that changes to the rules regarding reverse mortgages can only be made if those changes are designed to improve the financial safety and reliability of the program."

Knowing these guidelines can ultimately help senior homeowners in better understanding their financial position without compromising their home's equity. For more information on home equity and reverse mortgages, please visit

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

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