burningmoneyThis evening I face the unpleasant task of notifying all my prospective clients that their procrastination is about to cost them as much as $30,000 (or more) in reverse mortgage benefits.

Just moments ago HUD released Mortgagee Letter 2009-34 which will reduce Principal Limits by as much as 10% for all HECM loans with FHA case assignments dated October 1, 2009 or later.

Your lender can’t receive a FHA case assignment for you without an original, signed, dated counseling certificate.   If the certificate cannot be produced before next Thursday – an impossible task unless you opt for face-to-face counseling – you lose!  If you have a really experienced, sharp loan officer working with you… he/she is calling you this very moment with ideas and suggestions.  If not, you lose!  I have already contacted my clients, of course.

Hesitate and Lose

This is just one more example of why it is often foolish to wait.  Property values might come back… but real estate will never increase at previous rates for years to come… and certainly not fast enough to compensate for these blindside announcements from HUD.  And who knows what the House & Senate will contribute in coming months to “fix” a program that has benefited hundreds of thousands of senior homeowners to date.

More Help?

We suspect HUD acted with uncharacteristic speed to try to head off damaging legislation presently before the House and Senate.  The politicians are determined to help seniors by “fixing” the HECM program.  Watch out for “help” from the folks in Washington – it will cost you even more money.  Bet on it.

Author – Robert H. Irving, CSA®
Senior Reverse Mortgage Consultant

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