Senators Fret Over HECM Fees

Senate appropriators are expressing concern that seniors are charged "excessive fees" on Federal Housing Administration reverse mortgages, and they want the Department of Housing and Urban Development and the Government Accountability Office to conduct a study.Fees in FHA home equity conversion mortgages range from $8,000 to $17,000, including an origination fee permitted by HUD of 2% of the loan amount or $2,000, whichever is higher. "The most troubling fee is the origination fee," says the committee reports on the HUD appropriations bill. The HUD appropriations bill eliminates a loan cap on HECM loans, but the Senate appropriators rejected a Bush administration request to raise the loan limit on HECMs to the conforming loan limit of $417,000. "The Committee directs HUD and GAO to review the HECM program with particular emphasis on the financial risk to FHA and the homeowner if Congress were to raise the HECM loan limits," the Senate report says.