The Congressional Budget Office ([tag]CBO[/tag]) Cost Estimate for HR 5121 ([tag]Expanding American Homeownership Act of 2006[/tag]) contains interesting growth projections for the [tag]HUD[/tag] Home Equity Conversion Mortgage ([tag]HECM[/tag]) program. The projections assume that [tag]HECM program[/tag] reform measures included in HR 5121 are enacted. These reforms include lifting the 250,000 cap on the cumulative number of HECMs and raising the [tag]FHA loan limits[/tag] for HECM loans, which are expected to expand the program.

The market for HECM loans appears to be very robust and with limited competition, the potential for FHA to insure more than 100,000 loans annually appears likely. Whether the number of guarantees could exceed this level would depend on FHA’s ability to administer and manage the program in an efficient manner on a continued basis. CBO assumes that about 20,000 loans (with a face value of $5 billion) could be insured during the first quarter of fiscal year 2007 under the current statutory cap on the number of such loans that FHA can insure. We estimate that FHA could guarantee an additional 80,000 loans (with a face value of about $20 billion) in 2007 as a result of the changes proposed in this legislation. In subsequent years, assuming demand for this product continues to grow and FHA maintains its market share, CBO estimates that 140,000 to 160,000 such loans (with a face value of $35 billion to $45 billion) could be insured annually. (Emphasis added.)

Social tagging: HECM research > HECM statistics

A Few More Related Articles of Interest:

Growth in HECM Loans

HECM Growth By State

HECM Market Comparison 10/31/2007 vs 10/31/2006

Reverse Mortgage Industry Growth

HECM Lender Comparison 10/31/2007 vs 10/31/2006