To be eligible for an HECM
, in addition to being over age 62, the individual must own the home (it can be a two-to-four family home, provided the borrower occupies one unit).
> Read about HECM
second appraisal requirements at http://bit.ly/2E5Awgw.
If we exclude people in the bottom 30% of the wealth distribution, those with a home value under $100,000 (for whom the transaction costs would be too great to make a reverse mortgage worthwhile), and those in the top 20% of the wealth distribution (who won't need such a product and would benefit more from a life annuity), we are left with approximately 14% of the population of seniors who could potentially benefit from an HECM
Still, relatively few advisors are aware of the HECM
's improved security and benefits.
at 92; Ben Jakubowicz, What the Hecm
Is A Reverse Mortgage: The Importance of the Home Equity Conversion Mortgage in an Aging America, 54 U.
As the government-insured HECM
transactions are expected to incur only minimal losses, the majority support investment-grade ratings in spite of the relatively thin credit enhancement.
loans the lender's margin is typically between 1 percent and 2 percent.
Borrowers who take out an HECM
can choose to take the payment as a lump sum; a tenure payment, which acts as an income annuity and provides a payment as long as they're in the home and remain eligible; a term payment, which provides guaranteed payments over a set term; a line of credit; or a modified tenure or term payment, which carves off part of the line of credit for regular payments.
Reverse Mortgage Funding is an independent provider of HECM
products, offering flexible solutions, industry insights and responsive service to its partners.
Most reverse mortgages are Home Equity Conversion Mortgages (HECMs
), which are offered by private lenders and insured by the FHA; borrowers must be at least age 62.
It also offers a servicing software platform for all types of HECM
products as well as proprietary products.
Lending through the federally administered Home Equity Conversion Mortgage (HECM
) program was down 25 percent in the fiscal 2012 year ended Sept.