HECM Claims In Eight Months Already Exceed Fiscal Year 2008
The present fiscal year is just eight months gone (the HUD fiscal year begins in October) and it has already shown tremendous improvement in the Reverse Mortgage industry. According to data released from the Department of Housing and Urban Development, the number of home equity conversion claims going to the Federal Housing Administration in the past eight moths have already surpassed the total figure of the last fiscal year 2008.
By May end the Federal Housing Administration has already recorded 2,930 claims to the FHA insurance. The value of all 2,930 claims was $372.1 million which surpasses $345.7 million which is the total value of all 2,799 claims recorded in the last 2008 fiscal year. New reverse mortgage loans did not increase alone as the value of claims has also gone up. In 2003, the value of claims fell to $69.8 million from $80 of the previous year, However from 2003 the the value and number of claims have been increasing steadily. The month of may recorded a total of 467 claims with a total value of $64.8 million.
HECM claims covers the shortfall balance between outstanding mortgage balance and the maximum amount of the claim at the origination for properties involved in deed-in-lieu or foreclosure which is the difference between net sales of a mortgagor’s sale and loan balance is what is covered in HECM; or an optional amount for when the principal balance is close to the claim amount.
