A few reverse mortgage news headlines from the week:

• Reverse Mortgage Abuse on the Rise (Kiplinger)
• Fidelity Reverse Mortgage Recruits Online (Transworld)
• Sun West: Reverse Mortgage Satisfaction Continues To Be High (EWorldwire)
• FHA Modernization-Legislation that will profoundly affect the reverse mortgage industry (Dennis Haber Blog)

Have a great weekend!

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Activists in Detroit are taking action with the Moratorium WOW! Coalition by introducing SB 1306 to the Michigan legislature that would put a two-year moratorium or halt on foreclosures and evictions.  The group issued a call for demonstration to stop the eviction of Rubie Curl-Pinkins from her home in Detroit’s near west side. Ms Pinkins has lived in her home for 45 years, had it paid off, but was lured into a predatory loan when her medical bills piled up. Her adult daughter, who suffers from congestive heart failure and is on oxygen to help her breathe, lives in the home as well.

Countrywide Bank and its law firm Trott & Trott initiated foreclosure hearing against Pinkins. In an attempt to stay in her home Ms. Pinkins applied for a reverse mortgage and is able to pay off her loan balance in full but Countrywide refuses to accept her payment.

While I don’t agree that there should be a moratorium on foreclosures or evictions the story about the senior makes no sense to me.  We all know Countrywide is one of the largest providers of reverse mortgages so why wouldn’t they originate the reverse themselves and pay off the loan?  I tried contacting Trott & Trott but I haven’t received a call back yet.

Moratorium struggle builds, activists plan to stop eviction

Yesterday, the House passed H.R. 3221: The Foreclosure Prevention Act of 2008 by a vote of 272-152. The Bill will now go back to the Senate for a vote and, assuming this passes without delay in the Senate, the Bill will then go to the White House for final approval.

The version of the bill that will be voted on by the Senate does include the reverse mortgage provisions we were all hoping for.  Below is the summary of the provisions which NRMLA supplied.

1. A single national loan limit of $417,000 that can increase up to as much as $625,500 in high cost areas.
2. Home Purchase product authority.
3. Co-op product provisions.
4. Origination fees of 2% on the initial $200,000 loan amount and 1% on the balance thereafter with a cap of $6,000
5. Prohibitions on requiring the purchase of annuities and other financial products.
6. Restrictions around cross selling financial products.
7. Requirements on counseling protocols, funding and practices that promote independence and quality in counseling.

If you want to read the full text of the bill click here.