Industry News

Congress ponders reverse mortgage legislation

Plan would allow greater equity access to seniors

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The U.S. House of Representatives is considering legislation that would change the federal reverse mortgage program, including a plan that would allow older homeowners to access greater amounts of equity from their homes, a reverse mortgage lenders' group said Friday. The Expanding American Homeownership Act of 2006 (H.R. 5121) would create a single national loan limit for Federal Housing Authority Home Equity Conversion Mortgages (HECM); implement a HECM for home purchase option; and remove the cap on the number of HECM loans FHA can insure, according to the National Reverse Mortgage Lenders Association. "Taken together, these proposed changes would greatly benefit homeowners who are considering a reverse mortgage as part of their retirement planning," said Peter Bell, president of NRMLA, in a statement. "A single national loan limit would be especially helpful. It would benefit homeowners living in high-valued homes in counties where the FHA lending limit is much lower, which limit...