Last week marked the start of change for the reverse mortgage program when Congress approved the Reverse Mortgage Stabilization Act of 2013. With the bill, which awaits the President’s signature of approval, the HUD hopes to implement various changes to make the reverse mortgage process a lot smoother for consumers in the present and future. The changes pending approval include, a financial assessment of the borrower, mandatory set asides for property taxes and homeowners insurance, restrictions on the amount of funds that can initially be withdrawn and include all borrower spouses on the loan, even if they are a non-borrowing spouse.

It’s important to note that while not all regulations cast a dark shadow, the changes will affect how reverse mortgage transactions are carried out in the future.

I think it’s crucial that these changes be implemented, because, not only are based on past consumer experiences, ensuring that they benefit only the consumer, they are necessary. In the past, failure to pay property taxes or homeowners insurance has led to foreclosure when the reverse mortgage loan has become due. The HUD, however, has taken strides in the past months to course-correct the reverse mortgage program as situations arose. For example, in June, the HUD approved $40 million in funding to counseling agencies in order to sustain FHA-approved counseling for reverse mortgages.This was just in the first in many steps taken by the HUD in order to ensure the program runs as smoothly as possible. The potential impact of these upcoming changes, however, have yet to seen.

As an article in Reverse Mortgage Daily notes:

“Celebrations aside, sometimes the worst part of change is not the change itself, but rather the uncertainty prior to the event.”

I agree.

It’s not that I’m scared of change, not by a long shot, but how these changes will affect the program is so new that you can’t help but to be apprehensive. I believe these changes can do a lot of good for future applicants but, before the changes are implement, we continue to be in a state of suspended animation.

For now, we can wait and see, and hope, that these changes benefit all those involved.

In the mean time, Congress’ approval means “a public affirmation and a strong vote of confidence at a time when it may have been easy for Congress to say ‘no.'” There are many options available to you with a reverse mortgage and plenty of ways to use it during retirement. It’s crucial not to wait and take advantage of the reverse mortgage program now. If you think a reverse mortgage is right for you, let us know at PS Financial Services by giving us a call at (888) 845-6630 or email us at We do not pressure those who inquire, we’re simply here to help.