What is a HECM?

A Home Equity Conversion Mortgage (HECM) is commonly known as a reverse mortgage and is FHA insured. A reverse mortgage is a loan secured by a home, but, unlike a traditional mortgage, repayment is deferred to a later date, typically at the sale of the home.

A HECM can have a fixed rate or adjustable rate, either monthly or annually. In a fixed-rate HECM, the borrower receives all of their proceeds at loan closing, and the loan cannot be drawn from in the future. An adjustable-rate HECM is open-ended, allows for future draws, and allows for periodic prepayments that may increase the ability to borrow in the future. An adjustable-rate HECM contains a line of credit that is not taxed to the borrower when drawn. This provides a safe solution with built-in, no recourse equity protections for adults 62+ and their heirs.

Types of Reverse Mortgage Loans

  • Insured by FHA
  • Proprietary HECM’s
    (not insured by the FHA, popular for adults 55+)

A reverse mortgage is an FHA product with requirements and rules that require Lenders to have a unique LOS for proper loan manufacturing. ReverseVision® not only provides lenders with a reverse LOS, but also provides experience & best practices shared across our Lender ecosystem.

What is a Forward Mortgage?

A forward mortgage is the traditional mortgage a typical homeowner seeks. This mortgage is paid on a regular amortized schedule. These mortgages can be classified as FNMA, FHLC, FHA, VA, USDA, non-QM, and proprietary lending programs.