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Mortgage Bankers Association Works to Keep Reverse Mortgages Affordable

Published on 09/17/2010

The Mortgage Bankers Association has urged the Federal Housing Administration to adopt 12 new measures that would help ensure that reverse mortgages remain affordable for senior citizens.

As part of these 12 recommendations, the Mortgage Brokers Association suggests that both the Federal Housing Administration (FHA) and Government National Mortgage Association (Ginnie Mae) must strengthen the Home Conversion Mortgage (HECM) product.

“FHA and Ginnie Mae are cornerstones of the U.S. housing market as they provide access to mortgage loans for millions of first-time, and low- and moderate-income homebuyers. MBA members support both of these institutions,” said MBA Chairman Robert E. Story Jr., CMB.

It is crucial that the FHA and Ginnie Mae strengthen the HECM as it is the only government program that improves the financial situation of seniors by letting them tap into the equity in their homes.

The Mortgage Brokers Association particularly stresses the need for the FHA to change the way it calculates the actuarial soundness of the HECM product.

The FHA currently uses economic forecasts to determine the value of their portfolio. However, negative forecasts, which are likely due to the erosion of housing prices, jeopardize the value of HECM under this valuation process.

If you want to learn more about how the Mortgage Bankers Association is working to keep reverse mortgages affordable for you, simply submit a question above and a professional from AAG will happily answer your questions for FREE.

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