Posted by BrendaTx on 7/10/08 9:46pm
Msg #254838

I think this is a little bit dramatic...FF RMs again...

http://www.huliq.com/63936/indymac-bank-failure-and-reverse-mortgages

Reply by Linda_H/FL on 7/10/08 9:51pm
Msg #254839

"If IndyMac cannot sell these loans and “regulatory constraints” dictate that they can no longer offer money to borrowers on these lines of credit, then all these senior borrowers who are depending on these funds for living expenses, property needs, medical expenses, emergencies, etc. are in for a very rude awakening if they make that request that never gets honored."

I thought this was where HUD came in??

Reply by jba/fl on 7/10/08 10:50pm
Msg #254846

And who is HUD? n/m

Reply by Becca_FL on 7/11/08 12:31am
Msg #254853

Beeoucth, (or something similar to that?)... JBA...

BTW, No harm, no foul. You couldn't have known I was serious and that's what makes the whole thing even more comical than it was.

I dig you, Julie. You're a gem!

Reply by PAW on 7/11/08 6:48am
Msg #254857

Not all RM's are FHA/HUD backed. Financial Freedom sold many proprietary reverse mortgages where the mortgage is not guaranteed. That is what the article was trying to bring to light. My take on the article is a self serving "What IF?" expose by a competitor (All Reverse Mortgage).

Granted, non-insured (proprietary) reverse mortgages may be in jeopardy, but personally I don't see it in peril just because of the way a RM is structured. Proprietary RM's are fairly easy to sell on the secondary market as long as the RM isn't upside-down, that is, the principal balance doesn't exceed the equity in the property. The loan isn't based on the borrower, but strictly on the property. And historically, RM's upper limit is base on about 60% to 70% of the then appraised value of the property. Though property values have decreased significantly over the past couple of years, they certainly haven't dropped by 30%, so the RM is probably still a safe investment for banks and investment companies is the issuing institution must sell them.

Reply by BrendaTx on 7/11/08 6:56am
Msg #254858

**Not all RM's are FHA/HUD backed. Financial Freedom sold many proprietary reverse mortgages where the mortgage is not guaranteed. That is what the article was trying to bring to light. My take on the article is a self serving "What IF?" expose by a competitor (All Reverse Mortgage).**

Yes. Yes. Yes. And, Yes!

Such "scare" tactics disgust me.

Reply by Becca_FL on 7/11/08 8:18am
Msg #254861

"Though property values have decreased significantly over the past couple of years, they certainly haven't dropped by 30%"

What planet are you on, Paul? Here on the treasure coast of Florida home values have decreased more than 30% and the same is true for many areas in this country especially SoCal. I most certainly disagree with your statement.

Reply by PAW on 7/11/08 9:49am
Msg #254869

Becca, it may seem so, but the numbers just don't show it.

The Standard & Poor's/Case-Shiller home price index released Tuesday stated that all of the 20 metro areas that go into the index showed a drop, with the composite of all the markets showing a 15.3 percent decrease during the past year, which is a record low.

Las Vegas was in the worst shape, with a 26.8 percent decline during the past year, followed by Miami with a 26.7 percent drop.

The S&P/Case-Shiller index tracks the value of single-family housing in 20 major metropolitan areas, and is released monthly. The index doesn't report actual selling prices.

And recently, there has been a decrease in the decline. Actually, two markets, Charlotte, NC, and Dallas, TX, have shown a positive trend the past two months.

It must also be noted, the most mortgages that are in trouble are two years old or less. Those who financed or refinanced prior to the surge, is probably in pretty good shape overall.

Reply by Linda_H/FL on 7/11/08 9:52am
Msg #254871

Mea Culpa...forgot that little tidbit

"Not all RM's are FHA/HUD backed"...teach ME to post so late and just before bedtime!!

Reply by jba/fl on 7/11/08 10:01am
Msg #254872

I'm asking again: who is HUD? Is a Fed. org., I know, but

is it not the people of this country who ultimately pay for its activities/policies/blunders, etc?

Folks, this really is a serious question, one that is being asked under the guise of "The only stupid question is the unasked question." Am I in the wrong forum, therefore, we won't discuss here? Am I answering my own question(s).

Reply by Alice/MD on 7/11/08 10:41am
Msg #254879

Re: I'm asking again: who is HUD? Is a Fed. org., I know, but

I am waiting for the answer to "who is HUD"?

Reply by Sylvia_FL on 7/11/08 1:12pm
Msg #254889

Re: I'm asking again: who is HUD? Is a Fed. org., I know, but

Does this help?

http://www.hud.gov/library/bookshelf12/hudhistory.cfm

Reply by jba/fl on 7/11/08 2:25pm
Msg #254895

Re: I'm asking again: who is HUD? Is a Fed. org., I know, but

My real question involves the guarantee of the RM loans that may go bad. The answer as I see it is "We the people...." who will pay to make sure these loans are paid the way they should be. If I am wrong, I would like to know. If the gov't. guarantees, it is the people, is it not? Where else would the money come from?

BTW, 1972 Pruitt-Igoe public housing buildings in St. Louis are demolished.
A fine year - they were the worst case scenerio in 1967, imagine if they had continued. For those not familiar, this public housing project took up large area of scraped land, contained 2,870 dwelling units in 33 eleven-story buildings. It never achieved its goals with about 60% occupancy at its highest. When I saw it, all vestiges of drawing board completeness had vanished. So nice it is gone.

Reply by PAW on 7/11/08 7:58pm
Msg #254952

Re: I'm asking again: who is HUD? Is a Fed. org., I know, but

Yes, it's "We the People", but the borrower has already paid in with their premiums. In theory, the premiums are what is used to pay the homeowner (just like hazard insurance), but if FHA/HUD has to pay more than the premiums received, it could result in the federal bank (us) bailing them out. Just ask anyone in Florida about hurricane insurance and insurance companies having to pay out more than they took in.

Reply by Linda_H/FL on 7/11/08 8:23pm
Msg #254955

What happens now that the FDIC has come in and taken over

IndyMac? Just curious...

Reply by jba/fl on 7/11/08 10:23pm
Msg #254962

Re: What happens now that the FDIC has come in and taken over

Earlier in time, it was Savings & Loans; now they are Thrifts? (ref: Office of Thrift Supervision now shutting down IndyMac)

Is this potato with an 'e'?