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Consumer Safeguards
Consumer Safeguards
Experience Greater Financial Security Through a Federally Insured Loan
The Federal Government has put in place several safeguards for the HECM program to protect Seniors. Most important among them is the mandatory counseling session with a HUD/FHA certified counselor. This counseling session can be done over the phone for your convenience
The HECM is the only product of its kind guaranteed with the full protection of the U.S. Government.
Some other safeguards include:
No Maturity Date – A HECM will not become due, nor will it require repayments during the homeowner’s lifetime.
Asset protection – The HECM is a “ non-recourse” loan. This means the amount due can never exceed the home’s value. Any remaining equity after repayment of the loan belongs to the homeowner or their heirs.
No “Extra” Costs – The borrower is made fully aware of the total loan costs over the projected life of the loan.
Standards & Capped Interest Rates – On HECM mortgages, interest rates are set by the Federal Housing Administration to benefit the Senior homeowner.
Limitation Fees – Closing fees are limited by HUD regulations and may be financed as part of the HECM. This means there are very little out-of-pocket expenses.
No Pre-Payment Penalty – Although the loan is not due until the borrower permanently vacates the home, it can be paid off at any time, with no additional costs.
