New HUD Home Equity Conversion Mortgage (HECM)

by Michael Shohoney October 1, 2013 11:31

On September 3, 2013, HUD released Mortgagee Letter 13-27.  In it HUD made substantive changes to the Home Equity Conversion Mortgage (HECM) program that would go into effect on September 30, 2013.  The changes outlined in this ML, forced Math Corporation to revise both eZMathReverse and the ZMathReverse Engine.  Those changes have been made and both products were made available to our customers on September 29, 2013!

So, if you are a user of eZMathReverse, you need to use the new method (2013) for any transaction having a case number assigned on September 30, 2013 or later.  Please review the Mortgagee Letter for reference as there are issues that may affect your entries in the eZMathReverse calculator.  You need to address issues like Mandatory Obligations, additional Principal Limit, the correct MIP rates, etc., etc.  Also, depending on your results, your borrower may choose to make changes to how you've structured the transaction to better fit their needs.  So, there will be times when multiple runs of the product will be needed.

If you are a user of the ZMathReverse Engine and you have not responded to our contact with you, you need to let us know that you're ready for the engine.  Once you get in touch with us, we can have the software delivered immediately.

These changes are significant!  You need to look them over, understand them and apply them to the way you structure your transactions.  As always, if you have any questions, please feel free to contact us!

New Capability Added to QuickAPR

by Michael Shohoney January 16, 2013 05:50

We have added the capability of calculating the finance charge reimbursement to our QuickAPR function in eZMath and ZMath Stand-Alone.  We have also added the output of this information to our Engine family of products.  During a QuickAPR calculation, enter the disclosed finance charge.  If your finance charge violates Regulation Z, we will produce the reimbursement amounts at 0%, 0.125% and 0.25% tolerances.

As always, if you have any questions or problems accessing or using this or any feature of our products, please contact us.

CFPB Proposed Rule Will Result in New Version

by Michael Shohoney August 16, 2012 04:59
As all of you are painfully aware, the Consumer Financial Protection Bureau (CFPB) has proposed sweeping changes to way mortgages are disclosed.  In essence, they've proposed the use of two new disclousres, the Loan Estimate and the Closing Disclosure, that combine features of the previous disclosures into one.  For our users to more easily comply with these new rules, the ZMath® Engine, eZMath® and ZMath® will all be updated once the rules are finalized.  If you haven't begun to look at the proposed rules, we suggest that you do so that you're ready for the changes once we release them.  If you have questions, ideas or feedback, please contact us.  Also, watch this blog for further updates as we get further into the process.  Nothing is so constant as change.


by Michael Shohoney February 18, 2010 07:27
Math Corporation today made its next product, ZMathElements, available for license.  ZMathElements, as the name infers, are some of the base elements (i.e. functions and tasks) that make up the ZMathEngine.  It is targeted to those that only need a part or parts of the ZMathEngine, instead of the entire solution.  Go check out the product page and let us know what you think.  If you have Elements that you'd like to see, let us know.

eZMathReverse Updated

by Michael Shohoney October 5, 2009 09:35
The eZMathReverse application has been updated.  This update represents a complete rewrite of the previous version.  Not only does the new version incorporate both the original and new HECM principal rate factors, it also outputs the Truth-in-Lending statement, if applicable.  You can now use eZMathReverse as your one source of calculated figures for your reverse mortgage operation.  Give it a run and let us know how we did!

An Interesting Development

by Michael Shohoney March 24, 2009 10:55

There has been an interesting development in lending that is borne of this economic crisis we're in.  What is it?  It it borrowers that take an FHA loan even if they have a sufficient loan-to-value ratio.  What does this do?  It requires that they pay the funding fee and mortgage insurance premiums for a minimum of five years.  This is certainly an expense that most borrowers avoiided if they had at least an 80% loan-to-value ratio.  However, since some lenders are only allowing FHA originations, borrowers are being forced into this added expense if they want a loan.  In a future post, we will be showing you how to use eZMath and ZMath to originate loans with mortgage insurance, including FHA.

The Case for Reverse Mortgages

by Michael Shohoney February 2, 2009 10:38

It seems to us that the time is ripe for reverse mortgages.  Why?  Because it allows your customers to benefit from their most valuable asset.  It also helps them avoid liquidating other under-valued assets to supplement dwindling income due to the current financial crisis.  When you look at most of your retirement-aged customers, what one asset do they have that their heirs probably don't want to have to deal with in the future?  Most likely their home.  At the same time, assuming that stocks and other financial assets will recover lost value over time, it makes sense to hold those assets rather than liquidate them at these depressed prices in order to supplement income.  Additionally, stocks, securities and other financial assets are easier for heirs to deal with when the time comes.

There is general confusion and hesitation when it comes to reverse mortgages.  Many of the people that would benefit from this instrument do not understand the benefits nor the mechanics.  Many believe that it is possible for them to lose their home before they want to leave it.  Or they believe that they are not getting fair value from it.  Also, given the bad press that the mortgage industry has suffered through the past number of months, they are suspicious of anything that is unfamiliar to them.  Well, it is time for you to sit down with those potential clients and explain the benefits of this truly creative and valuable financial instrument.  You may just find that you have a number of originations just waiting to happen.

Refinance: The Road to Recovery?

by Michael Shohoney January 7, 2009 07:37

With interest rates at near-historic lows is a refinance boom on the way and will that wave be enough to mend an ailing industry?  That is the $64,000 question (seems a little under-priced doesn't it?) these days.  I have always believed that the mortgage industry is a self-healing industry and that refinance waves are often the beginning of the healing process.  The wounds suffered during this past (and current) crisis are certainly more mortal than those that we've seen in the past.  However, the industry can still recover from them.  How?  By sound lending to what have been reliable customers.  There is a real opportunity out there for existing mortgagors to lower payments and pay off loans with shorter terms.  These refi's can be the foundation of the rebuilding of the secondary market.

How do we go about that?  I have always believed that mortgage lenders have under-marketed themselves to their established borrowers.  Well, now is the time to approach those people with this opportunity and, in turn, boost your volume and generate business.  Out of this new opportunies will spawn.  It may not be the cure-all but it is certainly one way to begin the healing.