In 1992, the American Association of Retired Persons - who have since changed their name to AARP - attempted to reach large audiences by sponsoring several coalition building seminars throughout several states in support of FHA reverse mortgage development. After receiving a very positive response, AARP continued with additional seminars spanning the next twelve months. By the end of 1993, the FHA reverse mortgage was available to homeowners nationwide, with the exception of Alaska, South Dakota, and Texas.
To enhance the professionalism of the reverse mortgage industry, Jeffrey Taylor and Peter Bell founded The National Reverse Mortgage Lenders Association (NRMLA) in 1997. NRMLA is self-described as "the national voice of the reverse mortgage industry," and strives to educate consumers, as well as provide resources to lenders that promote a positive experience for all involved.
In 1999, both NRMLA and AARP expressed support for specific, nationwide parameters, including detailed limits on origination fees that can be charged by the lender. This recommendation was approved by Congress in the following year. Today, allowable origination fees range from a minimum of $2,500 to a maximum of $6,000 (HUD Mortgagee Letter 08-34).
The first official national reverse mortgage financial counseling exam was completed by 425 counselors throughout 43 states in 2000. This exam is designed to ensure that counselors understand how the FHA reverse mortgage operates so they can, in turn, effectively assist potential applicants in understanding and considering the reverse mortgage product.
AARP expanded upon its previous reverse mortgage involvement in 2001 by creating a web-accessible reverse mortgage information source, as well as a printable consumer guide. Additionally, 2001 marked the availability of telephone counseling sessions, eliminating the necessity of traveling to meet a counselor face-to-face.
In 2005, Texas became the final state in the nation to authorize a fully functioning reverse mortgage program.
The Economic Stimulus Act of 2008 was introduced in hopes of stimulating the economy and promoting home ownership through tax rebates, as well as increased loan amount limits for FHA mortgages. Allowable loan amounts were raised to match the $417,000 nationwide Freddie Mac conforming limit, up from previous limits as low as $200,160 (HUD Mortgagee Letter 08-35). This allowed individuals living in high-cost areas to utilize the FHA reverse mortgage to remain in their homes. The Housing and Economic Recovery Act of 2008 also included a provision banning lenders from trying to cross-sell products and requiring borrowers to purchase additional products as a condition of obtaining a FHA reverse mortgage (HUD Mortgagee Letter 08-24).
Just this year (2009), HUD introduced the FHA reverse mortgage for purchase program, a loan product developed to help homeowners easily transition into a home better suited to their needs (HUD Mortgagee Letter 08-33). FHA reverse mortgage loan limits were again increased in February, from $417,000 to $625,500(HUD Mortgagee Letter 09-07).
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