While the PATH Act passed in the House of Representatives on July 24, it was only by a margin of three votes. If the numbers are any indication, support for the bill is lukewarm at best, with as many people for it as there are against it.
In fact, House democrats and members of the housing Industry, such as the National Association for Home Builders, have expressed many concerns for the PATH Act’s proposed legislation.
“As currently drafted, the PATH Act does not provide the federal support necessary to ensure a strong and liquid housing finance system, and we urge the committee to make the necessary changes.”
I have to agree with CEO Jerry Howard, especially the federal support of the housing financial system. Financial support is what has made the currently Federal Housing Administration-insured reverse mortgage program the best at providing financial security for older Americans during retirement.
Most recently, a PRIVATE reverse mortgage done in 1997, has proven once again why reverse mortgages, insured by the government, are necessary. As a non-recourse loan, the FHA-insured reverse mortgage, makes sure that the homeowner never owes more than the value of the house. If the loan amount exceeds the home’s value at the time of the loan’s maturity, then the FHA covers the difference. Private lenders do not have this option, which potentially creates a hazardous situation for homeowners whose loans exceed their home value.
Without government help and security, the housing recovery can potentially stale, a factor which the PATH Act has yet to take into consideration. Homeowners need reassurance in order to continue to move forward, if not, the housing “boom” can possibly face another downturn.
Howard concluded by saying:
“At a time when housing is just starting to get back on its feet and provide job and economic growth, we don’t want to do anything that would reverse this positive momentum.”
We must continue to tread lightly in order to avoid another housing market collapse. Government funding and help has, thus far, been a great help to the reverse mortgage industry. Here’s hoping it continues to be in the future.
At PS Financial Services, a reverse mortgage company in Florida, we only offer FHA-insured reverse mortgage loans. We disclose everything to the best of our ability and always stress the benefits of MANDATORY reverse mortgage counseling. Give us a call at (888) 845-6630 or email us at info@PSReverseMortgage.com. We do not pressure those who inquire, nor is there an obligation for our services, we are simply here to help.