Tag: HECM Prepayments
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FHA’s Underwater Problem – Is the Worst Over?
FHA recently released another updated Home Equity Conversion Mortgage (“HECM”) loan level data file, this time showing all FHA-insured reverse mortgages originated through November 2011. Once again, prepayment rates declined to new lows: the annual prepayment rate for seasoned HECMs is about 4.7%, compared to the historical average of 6.8%. We have adjusted our HECM…
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Understanding Reverse Mortgage Prepayments: Focus on HECMs
Part I: Mortgage Prepayment Risk in Reverse Mortgage investors spend a great deal of time and effort analyzing prepayment risk, and with good reason. The mortgage borrower usually receives a valuable option: the ability to prepay at any time in whole, or in part, without penalty. This is sometimes easier said than done, especially in…