Lawmakers Seek Removal of HECM Cap

Congressmen Michael Fitzpatrick, R-Pa., and Jim Matheson, D-Utah, have introduced a bill to eliminate a cap on the number of reverse mortgages the Federal Housing Administration can insure.Congress raised the loan cap earlier this year on FHA home equity conversion mortgages from 150,000 to 250,000. But the demand for HECMs is so strong that it has raised concerns that the lenders could hit the 250,000 cap in the next 12 to 24 months. AARP and the National Reverse Mortgage Lenders Association have endorsed the bill. It is understood that the Bush administration supports the elimination of the cap.