Last week, the American Financial Services Association's (AFSA) State Government Affairs released its November white paper focusing on reverse mortgages and the impact of legislation and regulations on consumers.
Reverse mortgages originated in 1987 with the establishment of the Home Equity Conversion Mortgage (HECM) program. This program was subsequently insured by the Federal Housing Administration (FHA) in 1989. The use of reverse mortgages increased during the 1990s and 2000s, particularly among the retirement-age population.
Throughout the 2010s, reverse mortgages underwent significant changes due to frequent legislation and regulation. These included increased mortgage insurance premiums, a lowered interest rate floor, new Housing and Urban Development (HUD) policies aimed at enhancing safety, and protections for non-borrowing spouses. In recent years, there have been several attempts to further modify and regulate reverse mortgages at the state level.
The white paper is available along with other SGA resources on AFSA's website.