Wednesday, November 19, 2008

Generation Mortgage Offers Additional Peace of Mind to Senior Home Owners

/PRNewswire/ -- The U.S. Department of Housing and Urban Development HUD recently implemented new regulations for the HECM (Home Equity Conversion Mortgage) loan, increasing the federal insurance of that product. As a result, the FHA now will be insuring their reverse mortgage loans at a higher loan limit than before. Generation Mortgage Company(TM) has responded and is pleased to announce an increase in its lending limits.

Earlier this month, the U.S. Department of Housing and Urban Development, through the new regulation, established that the Federal Housing Administration will insure HECM mortgages with a lending limit up to $417,000 nationwide.

"Through the new regulation, the Federal government continues to acknowledge the importance of reverse mortgages to seniors and their families and is giving them greater freedom to take advantage of the equity they have worked so hard to build in their homes, with the safety of federal insurance," said Jeff Lewis, Chairman of Generation Mortgage Company.

A reverse mortgage is a loan available to senior homeowners (62 and older in the United States) and is used to release the equity in the property. Whether one lump sum, line of credit or monthly payments, the homeowner's obligation to repay the loan is deferred until the owner ceases to occupy the home as a primary residence, whether they pass away, sell the home or enter into managed care.

Mr. Lewis continued, "People are living longer and thus their adult children are finding themselves bearing the burden of managing the finances for their aging parents. A reverse mortgage gives them an option to leverage the least liquid yet most valuable of their assets. Homeowners can receive amounts based on a simple formula related to age, home value and the FHA expected interest rate."

Unlike a conventional mortgage, with reverse mortgages, there are no monthly mortgage payments. When the borrower leaves the home, the heirs may either refinance the loan and keep the home or sell the residence and retain the difference between the sale price and the loan balance. If the house is worth less than the mortgage amount due, the FHA will insure the difference.

He concluded, "Reverse mortgages have made a difference in the lives of many retirees affected by the recent economic crisis. The Federal government's increase of the amount which can be obtained through this product will hopefully resonate well with those who need money now. It is our goal at Generation Mortgage to educate seniors and the community about the safety and value of the reverse mortgage product so that more can take advantage of it."

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