Expanded Home Ownership Act May Change the HECM

The Expanded Home Ownership Act of 2007 H.R. 1852 was introduced by Maxine Waters and Barney Frank on March 29th.  If passed relatively intact it could make some interesting changes to the HECM program.  Along with other changes the bill proposes allowing a HECM to be used to fund the purchase of a new primary residence (1-4 Family Dwelling).  Currently, the Fannie Mae Homekeeper™ program enables the borrower to purchase a new primary residence but the product has never taken off quite like the HECM in recent years.  The bill also proposes a study regarding mortgage insurance premiums in which they would analyze and determine:

(1) the effects of reducing the amounts of such premiums from the amounts charged as of the date of the enactment of this Act on–

(A) costs to mortgagors; and(B) the financial soundness of the program; and

(2) the feasibility and effectiveness of exempting, from all the requirements under the program regarding payment of mortgage insurance premiums (including both up-front or annual mortgage insurance premiums under section 203(c)(2) of such Act), any mortgage insured under the program under which part or all of the amount of future payments made to the homeowner are used for costs of a long-term care insurance contract covering the mortgagor or members of the household residing in the mortgaged property.

While no one knows if this bill will pass, it’s good to see people making an effort to improve the HECM product.  If you would like to see more details of the bill click the link below:

The Expanded Home Ownership Act of 2007

Technorati tags: HECM, Reverse Mortgage, Fannie Mae, Senior Finance, FHA

Top HECM Reverse Mortgage Lenders

So who is the top HECM lender in 2007?  According to Reverse Mortgage Info.com it’s Wells Fargo.  To see the full list of the top HECM lenders check out the post below

Top Home Equity Conversion Mortgage Lenders – Through February 2007

I also encourage you to check out the HECM Data portion of the website which allows you to customize your HECM search.  All the information is pulled off the HUD website but this allows you to sort  the information anyway you like.

I hope everyone had a great weekend!

Technorati tags: HECM, Reverse Mortgage, Senior Finance, Mortgage

Private Equity entering the Reverse Mortgage Market

I thought this was an intersting press release on the Reynolds Group getting into the Reverse Mortgage market. They are taking undervalued city land and building brand new condos for people who are over 62 and are using reverse mortgtages to fund the purchases for each borrower. This is a news spin on some of the new uses for reverse mortgages today and I think we will be seeing more creative ways to use this product in the near future.

Reynolds’ Real Estate Private Equity Fund Targets Seniors
December 21, 2006

Reynolds Opportunities Partners has recently launched a private equity real estate fund to invest in condominium properties for senior citizens. The fund, dubbed Reynolds Opportunity Partners, is currently managing some $2 million but the firm expects to take in an additional $5 million by the end of January.

The fund is being managed by Jean-Paul Ngambi, former portfolio manager for the Employees Retirement System of Texas.

“We’re taking undervalued, inner-city land and redeveloping it into gated condo facilities and we’re using HUD reverse mortgages to sell it,” said Tony Reynolds, a partner at the Columbus, Ohio-based firm. “As long as they’re 62 years old, don’t have any federal liens, our partner, Community Central Mortgage, will prescreen them and if they qualify we’re going to move them into a condo for no money down, and they’ll have 30% equity. What we’re going to take is the power of attorney and reverse out the equity to pay for the unit through a HUD reverse mortgage.”

Reynolds said the firm is aiming to sell 60-70% of its developments using reverse mortgages and is currently targeting the cities of Detroit, Washington DC, West Palm Beach and Houston for project development. And while many real estate speculators are leery of a softening in the real estate market, Reynolds said now is a good time to buy.

“Right now, everybody is crying that the sky is falling but actually it is beautiful because developers who are holding too much land are giving up the land. So now land is at dirt-cheap prices and for me it is a great time,” he said.

The fund charges fees of 2/20 with a $25,000 minimum investment requirement.

Reynolds is a former Persian Gulf veteran and founder of Reynolds Family Homes, an urban affordable housing developer.