Evaluation of the Home Equity Conversion Mortgage Insurance Demonstration

Taken from HUD, (March 15, 1995, 127 p.)

Evaluation of the Home Equity Conversion Mortgage Insurance Demonstration (HECM) (March 15, 1995, 127 p.)

The Federal Housing Administration (FHA) has long been a pioneer in developing new mortgage products that enhance the affordability and accessibility of homeownership. Evaluation of the Home Equity Conversion Mortgage Insurance Demonstration (HECM) reports on a recent product of FHA’s 60-year tradition of innovation: insurance on reverse mortgages that help elderly homeowners remain independent by converting their home equity to cash. This second evaluation shows encouraging progress in meeting the major three objectives of the HECM Demonstration: to encourage the conversion of home equity to liquid assets, to promote participation in the reverse mortgage market by the private lending community, and to determine the demand for reverse mortgage products. Since the initial HECM evaluation in 1992, the number of HECM loans originated has tripled, and they are now available in 46 States plus the District of Columbia and Puerto Rico. This marked increase in activity reflects the growing familiarity and acceptance of HECM products among borrowers and lenders, the resolution of key legal impediments, and the growing number of qualified lenders and counselors.

One issue not addressed in the initial HECM evaluation was the adequacy of the HECM insurance premium and risk exposure for HUD, and ultimately for the American taxpayers. The results of an independent actuarial analysis indicate a substantial positive net worth for the present value of HECM insurance premiums paid to FHA — probably the result of the unexpectedly high percentage of borrowers with high-value homes who have taken out HECM loans. Although the (more…)

Written by charles dennis on June 4th, 2007 with no comments.
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AIG Turns Page on Excessive Mortgage Fee Allegations

AIG settles mortgage allegations

By Alan Zibel Associated Press

WASHINGTON - American International Group Inc. has settled allegations that it charged excessive mortgage fees and didn’t properly consider homeowners’ credit ratings. AIG, a New York insurance giant that also runs a home-mortgage business, said yesterday that it planned to take a $50 million charge in the second quarter to cover the cost of the settlement with the federal Office of Thrift Supervision. The company had taken a $128 million charge in the first quarter while the settlement was being negotiated.

AIG said yesterday that some of the money would be used to help borrowers with weak credit who face foreclosure after taking out mortgages from AIG Federal Savings Bank between July 2003 and May 2006. AIG Federal Savings is a Delaware-based unit of AIG. Some borrowers may qualify for a refund of mortgage fees instead of a new mortgage, the company said.

Under the terms of the settlement, AIG is required to identify the affected borrowers and provide aid to them. The company also must hire an independent consultant to monitor its process and report back to the government.

AIG also agreed to pay $15 million over three years to nonprofit groups that promote financial literacy and credit counseling.

The settlement will (more…)

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Nevada’s Top Reverse Lenders by Volume

Nevada’s top reverse mortgage lenders thru April 2007. Look for Wells Fargo’s lead to fall as the year goes on with Bank of America and Countrywide making noise at the party.

Written by charles dennis on June 4th, 2007 with no comments.
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