SAN DIEGO, Aug. 21, 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 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. LoanLove.com continues to show their dedication to helping home owners with reverse mortgage updated guidelines in a newly released article. The article, "Reverse Mortgage Reform 2013" (Updated HECM Guidelines)" goes into length on a new bill that passed recently and what it may mean for future homeowners with home equity.
The new law – called the Reverse Mortgage Stabilization Act is purposed to revitalize reverse mortgage loans and help seniors make use of their home's equity while minimizing risks that are usually tied with reverse mortgages. As the article states on home equity: "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 mortgages can prove to be a conundrum for those inexperienced homeowners. The Reverse Mortgage Stabilization Act helps ease the process of applying for a reverse mortgage with a few added requirements. One of the ways this new law helps loan borrowers – and lenders – is that the law now requires loan borrowers to go through mandatory financial assessment. This will help in assessing if any HECM products are appropriate for a home owner's financial scenario. Ultimately, this protects customers from taking on loans that don't meet their needs while also saving loan lenders the trouble of borrowers not being able to satisfy 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." as the Loan Love further explains.
The law now also limits the amount a homeowner may withdraw after loan approval. Loan borrowers are now only allowed to withdraw only the amount needed to pay costs that are considered 'mandatory obligations' such as closing costs. This serves to prevent possible losses that can occur when a loan borrower withdraws an entire loan amount after a loan agreement. And lastly, under no circumstances can the reverse mortgage updates be changed unless the changes are devised to improve the safety and reliability of the program.
These reverse mortgage loan changes can help senior loan borrowers in making the right decisions in the future. As the Republic sponsor Congressman Mike Fitzpatrick expresses about 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."
To learn more on the Reverse Mortgage Stabilization Act and the recent reverse mortgage updates, please visit LoanLove.com.
Media Contact: Kevin Blue, LoanLove.com, 949-292-8401, firstname.lastname@example.org
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