Stimulus Package Might Enhance Reverse Mortgage Loans

1/22/2009

posted by N. Sioris

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Discussions about the economic stimulus package have been front and center with all the media since last September when the Treasury Secretary pleaded in front of Congress for a blank check in the amount of $700 Billion dollars. Since that time we have seen several different incarnations of how best to dole out the money so that tax payers get the biggest bang for the buck. However, it appears that the first $350 Billion dollars that has been spent so far has not been the magic bullet everyone had initially hoped for, and liquidity has not yet returned to the credit markets.

In the meanwhile, millions of Americans are losing their homes and jobs at an alarming rate. With more than enough pain to go around, people are questioning why so few are being helped and why the tax payers are supposed to pick up the tab but see no personal benefit from all the so called "stimulus." Struggling Americans are starting to ask; "What's in it for me?"

Countless stories are related about how homeowners are unable to talk to an actual live person at the lenders' offices much less renegotiate or modify their mortgages. Even California Congresswoman, Maxine Waters, after more than two hours on the telephone to Bank of America could not get any relief for one of her constituents struggling to make their mortgage payments. Her ordeal was reported in a recent ABC Nightline story by Brian Ross. You can watch the Nightline video and read the complete story here:
On Hold: Even Congresswoman Gets The Runaround on Bank Help Lines.


AARP and NRMLA Make a Joint Request

To address the pressing financial needs for many senior citizens, AARP and NRMLA (National Reverse Mortgage Lenders Association) jointly requested that a provision be inserted into the Economic Recovery Bill released by the House of Representatives, that would increase the national loan limit for HECM reverse mortgages to $625,500. for 2009. This change is being suggested as a temporary measure through 2009, as part of the economic stimulus package. A permanent change would have to be enacted through a more appropriate housing bill.

The bill must get through Committee, then be brought to the House floor for debate and a vote. After that, it must pass the Senate. Obviously, there are no guarantees that the provision will make it through both the House and the Senate, but AARP and NRMLA are looking for support on this and are hopeful that senior homeowners might be able to benefit from the passage of this provision, even if it is only temporary.

Wouldn't it be nice if all of us could start to feel some benefit from all those Billions of dollars that are being tossed around in Washington?