Stimulus Bill compromise added Higher Reverse Mortgage Loan Limits

The Senate passed its version of the economic stimulus bill . The U.S. House & Senate conferenced to work out compromises for the stimulus package.

The committee retained the House language which adjusts the maximum claim limit for Home Equity Conversion Mortgages (HECM). This language adjusts the maximum limit for HECMs to 150% of the Freddie mac limit which would bring it up to $625,500. This increase is only for the balance of 2009.

The House approved the plan yesterday and the Senate was expected to also approve the compromise.

President Obama must sign the bill for it to become law. Once it is signed much must be done to implement law. HUD then issues a "Mortgagee Letter" which is the green light for lenders to offer HECMs at the new limits. Already lenders are scrambling to set up their software in anticipation of the new limits.

HUD has been known to take months to implement changes, example: HECMs for co-ops. Just last fall HUD increased limits to $417,000. Hopefully HUD will work quickly.