I just got a haircut on Tuesday. It'll grow back. The Home Equity Conversion Mortgage [HECM] is getting a second haircut shortly. Not sure if and when IT will grow back. My haircut was painless. But the haircuts for Seniors looking at a Reverse Mortgage are not without pain. Seniors will be able to access 15% less from the program than they were able to four months ago. Coupled with the fixed rate single advance option being the most attractive one, seniors are faced with less choices. Less choices rarely is a good thing.
The concern about the insurance fund for FHA is the driving force. Also there are fears of a continued decline in real estate values. Rather than adjust the Mortgage Insurance premiums, which are already higher than for the regular FHA programs, HUD is going this route. And for seniors who have not acted swiftly, it means less money available. And this is not a program that should have quick decisions rendered.
Will more haircuts be on the way? Difficult to tell, but it appears that the regular FHA program is scheduled for the next round of adjustments.