(707) 321-3424 --- (503) 312-2675 Rmay@MutualMortgage.com

The HECM product and it’s protections

We explain how home equity conversion mortgages have a number of government  protections provided by the FHA insurance

Rick May outlines the protections provided by the FHA insured HECM program

FHA reverse mortgages or Home Equity Conversion Mortgages (HECM) come with a number of protections that are part of the FHA (Federal Housing Administration) insurance. The FHA insurance provides the following protection and peace of mind to the borrower and their children:

  • The borrowers will never owe more than the home’s fair market value
  • If the loan balance ever grows higher than the value of the home, FHA pays the lender the difference when the last borrower dies or leaves the home.
  • Payments taken from the lender holding the reverse mortgage are guaranteed. If the lender ever goes into default, the payments are guaranteed to be made by FHA.
  • If the loan balance grows higher than the home’s value, the lender cannot take title. FHA insures that you can live in your home as long as the basic loan obligations are met (insurance and property taxes, etc.).