Over the past several years preceding 2022, many homeowners were able to refinance their homes at interest rates between 3 percent to 4 1/2 percent, saving the homeowner thousands of dollars a year in interest rate charges! Homeowners looking forward to using their built up home equity when they retire via a reverse mortgage are in for a very rude awakening.
Reverse Mortgages require paying off the existing first mortgage, and then replacing the first mortgage with a reverse mortgage that may have an interest rate that is significantly higher. The result can be an instant increase in interest rate charges that can easily cost an extra ONE to TWO THOUSAND DOLLARS A MONTH in lost equity per month!
Congress needs to get their head out of their arses and pass legislation CAPPING interest rate charges on Reverse Mortgages at 4%, with a first mortgage interest rate match if the homeowner has a lower first mortgage interest rate than 4%.
Reverse Mortgage origination fees also need to be capped at costs no more than 6% of the total value of the home, or $6,000 dollars, whichever is the lower amount.
Congress needs to pass revamped Reverse Mortgage rules immediately in 2023 or we will witness the biggest Reverse Mortgage swindle in 2023 and beyond at the expense of our retirees.
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