Press Releases
Economic Stimulus Bill Raises Reverse Mortgage Loan Limit, Making it Relevant to Even More Older Americans
Seniors researching reverse mortgages in New York, Massachusetts and California stand to gain the most
February, 24 2009 — Oakland, Calif. — The Economic Stimulus Bill signed recently by President Obama provides even more of America's seniors with the opportunity to benefit from a reverse mortgage. The new bill will raise the HECM loan limits to 150 percent of the Freddie Mac loan limit. Currently, that would create a HECM loan limit of $625,500, helping older Americans access even more of the equity available in their homes to augment retirement incomes or offset investment losses.
“The past six months have been very important ones for the reverse mortgage industry and seniors in
particular,”
said Bart Johnson, a reverse mortgage pioneer and current co-chair of the National
Reverse Mortgage Lenders Association. “During that time, the federal government has raised lending limits
twice and reduced and capped origination fees.”
Online financial resource Golden Gateway Financial today shared the average home values of individuals using its online reverse mortgage calculator to research reverse mortgages in the fourth quarter of 2008. This data demonstrates which areas could benefit the most from this new lending limit. According to Golden Gateway Financial, seniors in five states have a self-reported average home value between the most recent HECM loan limit of $417,000 and the new limit of $625,500. Those states include California, Massachusetts, New York, Washington and South Carolina.
Unfortunately, the data also reveals that many states with large populations of seniors have experienced significant self-reported drops in home values over the past year. This means that many seniors who previously stood to benefit from these new limits, no longer can realize the full potential of their home's equity. For example, seniors in Oregon, a relatively stable real estate market, reported a decrease of nearly five percent over the course of 2008 to finish at $410,765 for the fourth quarter—just under the previous loan limit of $417,000.
“It is encouraging that the government is moving quickly to provide seniors with even greater access to the
equity that exists in their homes,”
said Eric Bachman, founder and CEO of Golden Gateway Financial.
“But this data shows that falling home values are quickly outrunning new lending limits.”
| State | Q4 Average Home Value* |
|---|---|
| * Self-reported home values by seniors, 62+ in Golden Gateway Financial's reverse mortgage cash calculator for Q4 '08 | |
| ** Indicates states that were previously above prior lending limit of $417,000 during 2008 but declined in Q4 '08 | |
| New York | $550,065 |
| Massachusetts | $535,620 |
| California | $506,850 |
| Washington | $482,518 |
| South Carolina | $418,533 |
| Colorado | $416,803** |
| Oregon | $410,765** |
| New Mexico | $366,348** |
| Florida | $377,879 |
About Golden Gateway Financial
Golden Gateway Financial, located in Oakland, California, is a comprehensive resource for senior
citizens, baby boomers and soon-to-be retirees to assess their financial health at retirement. Through a unique set of online
tools and clear and unbiased communication, the company helps individuals address
“The Great American Retirement Dilemma.
” The tools enable users to better assess the security of their nest egg and to make intelligent choices to
fully enjoy what should be the best years of their lives. The company also operates the industry's premiere reverse mortgage
service with a proprietary reverse mortgage calculator and a team of trained counselors to help seniors better understand the product,
evaluate whether it is right for them, and identify their ideal lending partner.
