What Kinds of Reverse Mortgage Loans Are Currently Available?
Currently, the only kind of Reverse Mortgage that is widely available is the Home Equity Conversion Mortgage (HECM) family of loans, the HECM Standard and the HECM Saver programs. These loans are created and insured by the federal government and managed by the Department of Housing and Urban Development (HUD). The current relative absence of Jumbo Reverse Mortgages is largely due to the credit crunch that is being experienced world wide. A credit crunch is generally defined as a decrease in the availability of loans. Jumbo Reverse Mortgages are at particular risk during this time for a variety of reasons, including: • Declining house values – The home is the collateral on the Reverse Mortgage loan, if the home’s value declines, it is a much riskier loan for the lender to issue. • General perception of risk regarding the solvency of private banking institutions — Jumbo Reverse Mortgages were proprietary products designed by private institutions and were not insured by the Federal gover
