Obscure Regulation Halts Reverse Mortgages, FHA Lending in Some Towns

Thanks to the abrupt enforcement of a decades-old regulation that the Federal Housing Administration had seemingly ignored, consumers looking to buy homes or take out reverse mortgages in some 55+ communities have had their FHA loan applications rejected at the last minute in recent months.  Starting this past fall, applicants in the Sun City and Sun City West, Ariz., developments were told that their FHA mortgage applications violated the “free assumability” clause in the Code of Federal Regulations, and that they thus could not receive FHA-insured loans — typically only three days before the close of escrow.    Read the article………….

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