Reverse Mortgages 2013 - LoanLove's New Guide To Understanding The Recent Reverse Mortgage Reform

SAN DIEGO, Sept. 4, 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 trends, 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's team of mortgage professionals offer a new a new article detailing all the many new changes every homeowner should know about the recent reverse mortgage reform. This reverse mortgages 2013 article guideline, titled "Reverse Mortgage Reform 2013 (Updated HECM Guidelines)", explains to future loan borrowers the many important changes implemented with the recent reverse mortgage reform.

Much concern has been raised over a new law that has been passed that will change the way senior home owners will use mortgage loans. In bipartisan agreement from both Republicans and Democrats in congress, this law – called the Reverse Mortgage Stabilization Act - raises questions on just how exactly will reverse mortgages will be handled. The Loan Love article however points out to homeowners that there is nothing to fear of these new changes. In a statement released from Republican sponsor and Congressman Mike Fitzpatrick:

"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 home owners, a reverse mortgage or by its lesser know name, home equity conversion mortgage (HECM), can pay for closing costs by directly extracting from a home's equity. Specifically, senior home owners over the age of 62 years old can benefit from paying monthly costs by drawing out the money from their home's value, all the while holding their home's title under their name. But on the downside, these types of loans can often be complex in nature; The Reverse Mortgage Stabilization Act was designed to protect both consumers and lenders from the flaws of home equity conversion mortgages but adding a few new requirements.

The first thing the law now requires from loan borrowers is for them to undergo financial assessment. This will determine which HECM products are most fitting for a borrower, if there are any HECM products that are appropriate at all. This prevents the shrewd or the unknowledgeable practice of writing loans that don't align with a homeowner's needs, while allowing loan lenders to make lending requirements without repercussions.

As the Loan Love article further states: "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."

This new law also restricts the amount homeowners can withdraw when a loan has been approved. As the Reverse Mortgage Stabilization Act calls it, "mandatory obligations" limit the amount a borrower can draw out to pay only for payments considered absolutely necessary, like mortgage liens and closing costs. This protects the funding that goes into the mortgage loan and prevents the possibility of losses if a loan borrower withdraws too much upon the loan agreement.

Lastly, the new law states that there can be no call for changes regarding the rules associated with home equity conversion mortgages unless those changes are made to improve the financial safety and accountability of the system. Senior home owners can confidently make the best of their home equity by following these few simple guidelines.

For more information of the Reverse Mortgage Stabilization Act and HECM products, please visit

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

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