With the mortgage industry in the trouble that it’s in right now, reverse mortgages are becoming more attractive to some older homeowners who are over the age of 62. And now that the federal government has offset the rising costs of insurance premiums for reverse mortgages, these mortgage products are getting even more attention as a way for older homeowners with huge amounts of equity built up in their home to get a break from the pressures of paying a monthly mortgage payment.

The Department of Housing and Urban Development, or HUD, created another type of reverse mortgage which takes into consideration the high costs of the insurance premiums. It is called the Home Equity Conversion Mortgage Saver and it greatly reduces the upfront costs associated with a reverse mortgage. These upfront costs and fees are similar to those of buying or refinancing a home and they include paying for an appraisal, origination fees and more. Homeowners are also responsible for mortgage insurance premiums during the term of their reverse mortgage as well.

Last week, however, those monthly premiums nearly tripled when they went from 0.5 percent to 1.25 percent. The huge increase was the result of wanting to protect taxpayers and the federal government from massive payouts because of the declining home prices across the country.

The new reverse mortgage product greatly reduces some of these fees and premiums. For instance, those who take out a standard reverse mortgage would be responsible for paying an upfront insurance premium that is equal to 2 percent of the value of their property. For every $100,000, this would be about $2,000. With the new Home Equity Conversion Mortgage Saver, however, this fee could drop as low as $20 for the same property. There is a catch, though. Homeowners who choose the new reverse mortgage product are not allowed to borrow as much money as they can with the traditional reverse mortgage. For example, if your home is worth $200,000, you may only be allowed to borrow about $90,000 rather than the $116,000 you would be able to borrow under the old reverse mortgage product.

The best thing to do is to consult with a trusted mortgage broker and some family members or friends who know about the mortgage industry. In some cases, a traditional reverse mortgage may be the best financial option for you despite the fact that you have to pay higher upfront fees. And as always, shop around for the best mortgage lender when choosing a reverse mortgage. Companies are competing for your business these days and shopping around for the best deal is the only way you are going to come out ahead in any mortgage deal.

If you have applied for a mortgage loan in recent months, you may have noticed some trends occurring in the industry these days. Some trends are good while others may be holding some people back from enjoying the home-buying process. Here are five things that analysts are predicting will happen in the mortgage industry for the next few months.

Rates Continue to Drop
One of the best things about the current mortgage industry is that mortgage rates continue to drop. As a result, these rates are consistently setting new record lows for mortgage interest rates. This was a shock to many mortgage insiders who thought rates would begin rising again once the autumn season hit. Now, these insiders are saying mortgage rates may continue to drop during the last few months of 2010 and possibly into the first part of 2011. It will be interesting to see just how low these rates will go before they begin to climb or even stabilize.

Fewer Foreclosures Will Occur
If you have been keeping up with the mortgage industry at all, you know that several banks in the country have now put a freeze on thousands of foreclosure proceedings as a result of many bank officials admitting to signing foreclosure paperwork without reading it. This means that they could have signed off on thousands of foreclosures that should have never been approved. When all is said and done, there may be thousands of homeowners who will not be foreclosed upon which leaves fewer foreclosed homes on the market.

The Mortgage Process is Lengthy
The time it takes to process a mortgage and a refinance is very long these days because of underwriting and other factors. Some mortgage lenders are suggesting that home buyers lock in their rates for 60 days when applying for a mortgage because it could take that long just to get the paperwork pushed through. Home appraisers are in high demand which means their schedules are full and they cannot make it to homes as quickly as before to appraise them which only adds to the amount of time it takes to process a mortgage loan. Remember to be patient and diligent during the process and you will be able to see it through.

Jumbo Rates are Falling
A jumbo mortgage is a mortgage loan for an amount larger than $729,750. The mortgage rates for these huge loans are falling faster than those for non-jumbo loans. A couple years ago, these rates were much higher and they didn’t continue to drop until just recently. Currently, rates for jumbo loans are only about 0.75 of a percentage point more than the rate for a regular mortgage loan. Unfortunately, there are not many people who are refinancing their jumbo loans because the underwriting process is very strict and they either do not qualify for the low rates or they simply don’t want to go through the lengthy process.

No-Cost Refinancing is Attracting Homeowners
With mortgage rates at historic lows, many homeowners are refinancing their loans with zero-cost refinances. This term is misleading, however, because homeowners still have to pay closing costs and other fees when they refinance their home. With this type of refinance, though, the homeowner accepts a higher mortgage interest rate in return for paying zero fees and costs to refinance.

In a deal that could mean about $86 million in mortgage relief for Arizona homeowners, Wells Fargo has decided to lower the mortgage balances of about 1,700 people who signed up for a particular ARM.

The state’s attorney general, Terry Goddard, announced that Wells Fargo will also be reducing the interest rates on many more mortgages throughout the state. The overall financial benefit for homeowners in Arizona will be more than $150 million when it is all said and done.

But not everybody in Arizona will be able to benefit from these actions. Actually, only the borrowers who signed up for a “payment option adjustable rate mortgage” will be able to get some mortgage relief. And of those people, only the ones who got their mortgage through Golden West Corporation or Wachovia will be able to take advantage of the reductions.

According to Goddard, these types of mortgages are too complicated and sophisticated for the average homebuyer. Yet they were sold to many Arizona residents without their complete knowledge of how they work. One aspect of this type of mortgage loan has a “negative amortization,” which means that the unpaid balance of the mortgage will actually get larger during the term of the loan. The borrowers who chose this type of loan were sold a fraudulent product that was misrepresented. As such, many AZ mortgage borrowers were deceived and that is why Wells Fargo is now trying to make things right even though officials with the bank say they did nothing wrong.

Here’s how these type of mortgage loans worked: The initial interest rate was very low to begin with. After five years, the rate would increase. The minimum monthly payments were also low to start out. But if the homeowner wasn’t paying toward the principle balance, the remainder was added to the loan balance. This increased the overall cost and made it so that borrowers would end up owing more than they originally borrowed once the rates reset. These types of loans are designed for investors who buy houses and quickly resell them before any of the balances add up.

Goddard believes that the homeowners who chose this option “did not understand the consequence of choosing the lowest payment option.” As a result, they signed up for a loan that they did not fully understand. Although the type of mortgage loan in question is a specific type of adjustable-rate mortgage loan, Goddard says that there is nothing wrong with a normal ARM. In fact, he says, he has one himself. With the current mortgage rates where they are right now, he’s probably enjoying his adjustable-rate mortgage, too.

Keeping up with the current mortgage rates is almost like riding a rollercoaster lately. For the longest time, the rates were holding fairly steady a few months ago. Then they started to decline. In fact, they declined for several weeks in a row. A couple weeks ago, they went back up slightly and now the current mortgage rates have dropped again to another historic low.

According to figures by Freddie Mac, the rates for a 30-year fixed-rate mortgage have fallen to a record low for the 12th time in only 16 weeks. Analysts attribute the rate drops to the uncertainty in the market. People aren’t spending like they used to and instead they are putting their money away. That means fewer borrowers on the housing market. Inflation is also playing a major role in the lowest mortgage rates in decades.

Here is a breakdown of the current mortgage rates you can expect if you qualify for the best rates available:

A 30-year fixed rate mortgage has dropped to 4.27 percent with 0.8 percent of the borrowed amount paid directly to the lender at the beginning of the loan. Freddie Mac has been tracking rates for nearly four decades and this is the lowest the rates have been in all those years. It also marks the 12th time the rates have hit a record low since the last couple weeks of June.

Mortgage rates for a 15-year fixed rate mortgage are even lower than that. That rate currently stands at 3.72 percent with 0.7 of a point paid to the lender up front. These numbers for the 15-year fixed rate loan have not been this low in nearly 20 years. It’s about a half of a percentage point lower than it was a year ago at this time when the rate stood at 4.33 percent.

Rates for a five-year ARM are currently at 3.74 percent which represents the lowest it has been in five years. One-year mortgage ARMs are sitting at 3.40 percent. Rates have only been that low one other time since 1984 and that was only three weeks ago.

As low as these rates are, some analysts are expecting mortgage rates to drop even lower than they are now. According to Richard C. Temme of the California Association of Realtors, believes Fannie Mae and Freddie Mac may offer mortgage rates as low as 3.75 percent in the next few months because the Fed is running out of options. Unfortunately, he says, lenders are too scared to take any more chances with borrowers who have bad credit because of what has happened in the last few years. Hopefully something will work out soon to get the housing market jump started once again where people are confident about buying.

If you have already refinanced your current loan at today’s mortgage rates and you are still looking for a way to make your monthly payments even lower, there may be one strategy left that you haven’t tried.

“Recasting” is another term for reamortizing and it gives the mortgage borrower the opportunity to lower their monthly payments if they already have a fixed rate loan. The process involves the borrower paying a small fee rather than applying or a new mortgage loan so they do not have to worry about paying appraisal fees and other costs associated with getting a refinance. In addition, recasting can also help borrowers save on the interest of their loan over the long term because it helps pay down the principal amount of the loan.

Because recasting does not create a large stream of revenue for banks and lenders, you won’t see any advertisements for this option. Refinancing is a better moneymaker for lenders so the only way you will find out more about recasting is if you ask your lender about it. However, not all loans qualify for recasting so be prepared for that as well.

Recasting is so unpopular for banks and the numbers can attest to that. For instance, Chase only has about 200 recasts per month out of about 10 million mortgage loans. For Bank of America’s 14 million home loans, only about 200 to 300 of those get recasted.

If you are considering this option, here is a basic rundown of how it works. First, ask your loan officer if you can put a large amount of money towards the principal balance on your mortgage. If the lender agrees, you can recast your loan so you pay a smaller monthly payment for the remainder of the loan. It doesn’t shorten your loan terms, but it does make it easier to make the monthly payments.

Recasting is typically a good choice for homeowners who have come into a large sum of money either through a bonus at work, a modest inheritance or some other occurrence. Normally, refinancing would be a good option but not every homeowner will qualify for a refinance or their credit score would cause them to get a higher interest rate than they are paying now. If this is the case, you can put that lump sum toward the principal balance to reduce that. This also reduces the overall interest that you will pay so your monthly payments can be lower.

If this sounds like a viable option for you, check with your loan servicer to see if you qualify. As always, weigh all of your options and crunch the numbers before making your final decision.

With so many homeowners across the country in danger of losing their home through foreclosure, Bank of America has found a heart and decided to put a freeze on evictions for the time being in many areas of the nation.

Of course, as with any major decision like this, it’s not all about what is better for the consumer. The bank has said that it was concerned that some of the paperwork was not handled properly in many foreclosures so now evictions for those who are affected by the paperwork in 23 states have been halted for the time being. The reason the freeze is only taking place in 23 states is because those are the states where a court order is needed in order to foreclose on a home. However, lenders are feeling the pressure of putting evictions and foreclosures on hold for all 50 states as unemployment continues to be a major problem.

But BofA isn’t the only mortgage lender that has put a moratorium on evictions recently. Ally Financial Inc. in Detroit has decided to freeze evictions in 23 states, but that was also because of paperwork what may not have been handled correctly. The head of that financial institution’s document processing team stated that he signed numerous affidavits stating that the paperwork for foreclosures was done correctly, but he also said he didn’t read the documents beforehand. Chase has also halted foreclosure proceedings due to similar circumstances.

As for Bank of America, the foreclosure process is simply being delayed right now until the affidavits for foreclosure cases have been amended. This will only be good for those that have not already gone to judgment in those 23 states where the freeze is being done. BofA has not mentioned how many borrowers will be affected by the freeze, but those who are affected will surely enjoy their reprieve.

Jerry Brown, the Attorney General in California, wants to be sure the banks are going by the letter of the law in his state when they foreclose on a property. He would also like to require lenders to help homeowners understand their options regarding loan modifications and other ways to help them afford their monthly payments before evicting them from their homes.

Wells Fargo, the largest bank in the state of California, is the leader in mortgage originations. Officials with that bank said that the affidavits they have signed are accurate, but would not say certify that they are all signed properly.

Many states across the union are getting financial relief for its residential homeowners. With the condition of the housing industry, no state in the United States is above needing help these days. Ohio is one of the states most affected by the mortgage crisis and the federal government is trying to do something about it.

One of the new programs to help the most affected states is the Hardest Hit program. Ohio is one of the 17 states included in this program which gives financial relief to homeowners in states where the unemployment rates are the highest. Ohio received $320 million this week to help troubled homeowners – especially the ones who are currently unemployed – to get back on their feet financially. Officials expect the money will help at least 26,000 troubled homeowners avoid going through foreclosure so they can stay in their homes.

The $320 million is going to go through the Ohio Housing Finance Agency’s Restoring Stability program. This program allows unemployed homeowners throughout Ohio apply for financial assistance for their mortgage payments. A good portion of this money is going to go into a program that will pay for up to 15 months of financial assistance to unemployed homeowners. This will give them some relief as they search for a new job or go through job training.

Some of the other money will be allocated for other forms of help. For instance, some of it will go to help troubled homeowners catch up with their delinquent mortgage payments by offering one-time assistance. Another portion of it will go to help convince lenders and banks to reduce the principle so the homeowners can get a loan modification. The money for this type of relief may also go to help with short sales and other types of mortgage help.

Some are criticizing the program saying that the money is only going to help about one-third of the Ohio homeowners who find themselves in financial trouble. There were nearly 90,000 foreclosure filings last year and thousands more this year. But Doug Garver, the executive director of Ohio Housing Finance Agency, says that the program is a great start to something that could help thousands more in the long term.

If you live in Ohio and are in need of financial assistance for your mortgage payments as a result of unemployment, you can get more information about this program by going to www.savethedream.ohio.gov or call (888) 404-4674.