September 12th, 2015

I'll end this discussion on Federal economic stats and how they are corrupt and illegal with a look at interest rates===FED vs main street interest rates and the coming bond market economic crash.  Neo-liberals work for global corporate power and wealth---period as do Republicans....that includes bilking labor and justice.  If they control Congress as they do today----then the FED and US Treasury will work for Wall Street profits at our expense.  This is why we must get rid of Clinton neo-liberals in primaries at all levels of government to reverse all this.
This coming crash will behave like the last---banks have lowered credit cards to 0% interest---cars are being sold at 0% interest---home mortgages are tied to low-interest ALL HAVING CLAUSES THAT STATE INTEREST RATES WILL BALLOON UNDER CERTAIN CIRCUMSTANCES----LIKE WHAT IS ABOUT TO HAPPEN.  A pol working for their constituents would be educating the public against getting involved in all this---a pol working for Wall Street sits quietly and allows main street to be killed.  When the economy crashes the FED is pushed to raise its interest rates on banks who then use this as an excuse to sock it to consumers.  The crash is deliberate as is marketing 0% interest just before a crash.

Below you see the last phase of the bubble implosion neo-liberal economics---the Wall Street investment firms and the rich have these few years been buying credit default swaps---they call these 'insurance' especially in the bond market because that is where the collapse was focused.  So, all those corporate and municipal bond sales super-heated to implode the market will crash and take out the corporations and municipalities---like Federal, state, and local government while the investors pretend to be protected from loses by Credit Default Swap insurance.  That was what AIG was in the subprime mortgage fraud.  This is important because it is this Bain's Capital implosion with corporate debt that allows corporations to go bankrupt -----AND NOW MUNICIPALITIES----while Wall Street runs with all the assets.  When corporations and municipalities fail---the FED MUST RAISE THEIR PRIME INTEREST RATE TO 2-3%.  Keep in mind the same people today saying all that is happening is bad----are the same people who wrote these bad economic policies to do just this.

ALL THIS WAS PLANNED BACK IN THE CLINTON ERA----IT IS A DELIBERATE SET OF POLICIES TO FLEECE THE AMERICAN TREASURY AND PEOPLE'S POCKETS AND IT IS ALL UNCONSTITUTIONAL AND ILLEGAL---
PIMCO will be the AIG of the bond market fraud----Bill Gross loaded PIMCO with bond sales he knew would implode and then sold the global corporations a few years ago before it collapses into bankruptcy.  This will be the spark of high interest rates from economic crash.  For those who find all this too much---you just need to know PIMCO deliberately placed municipalities and pension fund investments into bond deals they knew would implode----sending trillions to the rich---and sucking government coffers and people's assets dry.  Because it is all deliberate, willful, and done with malice----it is illegal as it involves government transactions.

Pimco sold a lot of bonds when Bill Gross left... www.investmentnews.com/.../pimco-sold-a-lot-of-bonds-when...

• Cached

The firm sold about $18 billion of Total Return fund assets to other Pimco funds and accounts between October and March, helping it meet more than $100 billion of ...


Fund Description

The PIMCO Investment Grade Corporate Bond Index Exchange-Traded Fund is an exchange-traded fund (ETF) that seeks to provide efficient and optimized exposure to the investment grade corporate sector. The fund seeks to provide total return that closely corresponds, before fees and expenses, to the total return of The BofA Merrill Lynch US Corporate IndexSM.



Wall Street Prepares To Reap Billions From Another Main Street Wipe Out


Submitted by Tyler Durden on 07/21/2015 22:00 -0400



inShare31  On Monday evening, we noted that market participants are reducing the size of their trades and turning to derivatives in order to avoid the perils associated with what are increasingly illiquid markets. 

While we’ve been pounding the table on bond market liquidity for years, the rest of the world (operating on the standard 2-3 year time lag) has just begun to wake up to how thin markets have become. Now, pundits, analysts, billionaire bankers, and incorrigible corporate raiders alike are shouting from the rooftops about the pitfalls of illiquidity. The secondary market for corporate credit has received the lion’s share of the attention (for reasons we outlined yesterday) and as Carl Icahn was at pains to explain to Larry Fink last week, ETFs are a large part of the problem. 

The story is simple. Shrinking dealer inventories (the result of a post-crisis regulatory regime wherein the term "prop trader" is taboo) have made it harder to transact in size without having an outsized effect on prices for corporate bonds. Meanwhile, artificially suppressed borrowing costs and the attendant hunt for yield have led to record corporate issuance and voracious investor demand. In short, the primary market is booming while the secondary market has become a veritable no man’s land. If you need an analogy, try this: the crowded theatre is getting larger and more crowded while the exit keeps getting smaller. 

The proliferation of ETFs has made it easier for the retail crowd to chase yield in corners of the bond market where they might not have dared to venture before, and this has only served to create still more demand for things like high yield credit. 

Now, with the US staring down a rate hike cycle, and with some corners of the HY market (see HY energy for instance) facing a number of insurmountable headwinds going forward, the fear is that the retail crowd will all head for the exits at once, leaving fund managers with a very nondiversifiable, unidirectional flow which will force them to sell the underlying assets into illiquid markets. Due to a generalized lack of market depth, that selling pressure has the potential to trigger a rout. Of course a sharp decline in prices would send still more panicked retail investors to the exits necessitating even more asset sales by fund managers and so on, and so forth.

But don’t take our word for it, here’s WSJ with more on how Wall Street is preparing to profit from an unwind in Main Street’s ETF and mutual fund portfolios:

Wall Street is preparing for panic on Main Street.

Hedge funds are lining up to profit from potential trouble at some "alternative" mutual funds and bond exchange-traded funds that have boomed in popularity among retirees and other individual investors.

Financial advisers have pushed ordinary investors into those funds in search of higher returns, a strategy that has come into favor as Federal Reserve benchmark interest rates remain near zero. But many on Wall Street worry the junk bonds, bank loans and esoteric investments held by some of those funds will be extremely hard to sell if the market turns, leaving prices pummeled in a rush for the exits.

Concerns about such scenarios have been escalating for some time. Now, investment firms such as Leon Black’s Apollo Global Management LLC and Oaktree Capital Management LP are laying the groundwork to cash in if they come to pass.

Apollo has been raising money from wealthy investors and portfolio managers for a hedge fund that snaps up insurance-like contracts called credit-default swaps that benefit if the junk bonds fall. In marketing materials reviewed by The Wall Street Journal, Apollo predicted: "ETFs and similar vehicles increase ease of access to the high yield market, leading to the potential for a quick ‘hot money’ exit."

Guided by a similar outlook, Reef Road Capital Management LLC, led by former J.P. Morgan Chase & Co. proprietary trader Eric Rosen, has been betting against, or shorting, exchange-traded funds that hold junk bonds and buying options that will pay off if the value of these high-yield securities falls.

The hedge funds are taking aim at what is regarded by many on Wall Street as a weak spot in the markets. "Liquid-alternative”" funds have emerged as one of the hottest products in finance, fueled by a promise to deliver hedge-fund-style investing to the masses. They use many of the same strategies as hedge funds, with wagers both on and against markets, but are open to less-wealthy investors with fees closer to mutual-fund standards.




Liquid-alternative funds manage a cumulative $446 billion, according to fund tracker Lipper, up from $83 billion at the start of 2009. High-yield bond ETFs, another popular product, manage more than $38 billion, and in the week ended last Wednesday took in their biggest inflows on record at $1.5 billion, Lipper said.

Activist investor Carl Icahn brought the issue to the fore last week, saying at an investment conference that he feared a bubble was expanding in junk bonds thanks to the rush into high-yield exchange-traded funds run by companies like BlackRock Inc.

Managers of ETFs and liquid-alternative funds said they are well-protected against any tumult. Some have lines of credit to cover redemptions if needed and point to research showing that even during past crises, mutual-fund investors generally withdraw no more than 2% of assets each month.

When Reuters first reported that fund managers were lining up emergency liquidity lines like the ones mentioned above, we smelled trouble and were quick to note that not only did that not bode well for the market, but that funding redemptions with borrowed cash is a fool's errand and depends upon the market stress being transitory (see here and here). But beyond that, it betrayed the extent to which the country's largest and most influential ETF issuers have become worried about just the type of meltdown the hedge funds mentioned above are banking on.

If you want a candid take on just what the smart money thinks is ahead for all of the retail money that's been herded into esoteric ETFs, we'll leave you with the following from David Tawil, president of hedge fund Maglan Capital, who spoke to WSJ:

"They are going to be toast. It will be one of our first levels of shorting the moment we start to see cracks, because it’s ripe with retail, emotional investors."
_______________________________________________

The FED interest rate is the amount of interest charged to banks for money from FED.  Since the big banks are bankrupt most money is coming from the FED----ergo the trillions of dollars in FED debt.  Some think the FED debt is now $15-20 trillion.

When the FED gives zero % interest it is charging nothing to banks for money supposedly to 'stimulate' lending to main street.  We know banks have never started lending to main street and all that low interest rate has gone to global corporations and the wealthiest.  When the FED raises interest rates 1 or 2 percent it may not sound like a lot but it affects interest rates on main street much more.  It is not a one to one ratio.  Keep in mind the FED KNOWS the real inflation rate is greater than 5% and interest rates are 8-18% on main street but it does not care-----all that matters is how to maximize global corporate profits with manipulating these values.

Keep in mind higher FED rates will have less effect on banks as they prepare to make their interest rates soar----it has all the effect on main street----in higher inflation, job stagnation, bond defaults, and lost pension, 401K, savings wealth.  Below you see the warning of danger in failing to raise FED rates----and the warning against holding onto bonds----as municipalities like Baltimore will have to----while this article alludes to CDs as safer

Prime rate, federal funds rate, COFI


By Bankrate.comThe prime rate, as reported by The Wall Street Journal's bank survey, is among the most widely used benchmark in setting home equity lines of credit and credit card rates. It is in turn based on the federal funds rate, which is set by the Federal Reserve. The COFI (11th District cost of funds index) is a widely used benchmark for adjustable-rate mortgages.


March 23, 2015

How Fed Rate Hikes Could Affect Retirement Planning


The Federal Reserve has caused quite a stir over the last few months with inconsistent messages regarding its time line for raising interest rates. In January, Michael Gapen, former Fed monetary policy division head, told USA Today that, “I think they're in a wait-and-see mode, and they're still sticking to their mid-2015 guidance.”

In mid-February, however, the Fed's meeting minutes indicated that they might not raise rates until later in the year. “Nonetheless, a number of participants suggested that they would need to see further improvement in labor market conditions and data pointing to continued growth in real activity at a pace sufficient to support additional labor market gains before beginning policy normalization,” the minutes stated.

And finally, on March 18 the Fed issued a policy statement that it would indeed consider raising rates as early as June, albeit more gradually than officials first estimated. Current estimates put the federal funds rate at 0.625 percent for the end of 2015—still more than double the long-standing 0.25 percent but roughly half the 1.125 rate predicted in December.

Despite the uncertainty, it does seem safe to assume a hike will occur in the near future. “The Fed has kept interest rates the same since 2009, and at some point soon they'll have to increase them,” said Kyle O'Dell, President of Secure Wealth Strategies. “The longer they wait, the greater the long-term risk to our economy.” The Fed has long waited for the job market to improve, but despite falling unemployment, labor force participation is still declining (Bureau of Labor Statistics) and real wages have barely risen since 2010 (Center for American Progress). In the meantime, asset bubbles have only grown larger.

______________________________________________

You see below how the FED interest rate affects the economy. We know the collapsing bond market will take out municipal bonds and pensions and 401Ks invested in the worst of bond market.  So, when they say people can place their money in savings accounts for higher interest----JUST WHAT WILL MOST PEOPLE HAVE LEFT?   Note the higher interest rates on credit-----but look closely at the effects on imports vs exports.  Higher interest rates favor IMPORTERS and hurt EXPORTERS.  Now, if you are that new entrepreneur and startup being told to market yourself globally-----YOU ARE THE EXPORTER.  Meanwhile the US global corporations working overseas ARE THE IMPORTERS.  Wall Street is making it harder for exporting businesses in the US to compete while aiding global corporations importing into the US.

Now, since Wall Street's planned transition to a US with International Economic Zones operating in the US will take a decade or more to install----AS IS HAPPENING NOW IN US CITIES-----they don't need policy making exporting less expensive----they need global corporations to import more cheaply.  If these FOXCONN campuses and International Economic Zones are allowed----then the FED will reverse this as now global corporations will be EXPORTING FROM THE US.

These higher interest rates kill main street wanting credit and they kill small and regional businesses in the US wanting to export to the global market.  THAT IS WHAT NEO-LIBERALISM DOES----IT MAXIMIZES PROFIT AND POWER TO GLOBAL CORPORATIONS AND KILLS CITIZENS AND DOMESTIC BUSINESSES.


What are the possible consequences of the imminent FED rate hike?

Now that the FED is getting ready to increase the interest rates I want to discuss what are the effects of an interest rate hike in the U.S. in both the real economy and the financial markets. I will also illustrate the possible effects that this hike will have in the markets around the world.

U.S. Real Economy

• Banks will pass the increase in interest rates to the consumers and businesses, which will mean higher borrowing costs. Loans, credit cards, and mortgages among other obligations will have higher interest rates. This will leave less available income in the hands of businesses and consumers, causing a decrease in consumption and investment.

• Saving accounts will become more attractive due to the increase in the interest received. For the retired people that live in their savings, an increase in interest rates is great news.

• The increase in interest rate will also increase the cost of financing the U.S. government borrowing. The most likely result would be a future increase in taxes or a cut in government spending .

• Finally, the U.S. dollar will appreciate against other currencies (it has been doing that since mid 2014). This is positive for importers but negative for exporters, so the investopedia.com">balance of trade worsens as exports decrease and imports increase.
  
  ____________________________
  So while young Americans are being sold on creating their own startups and heading into a global market all while the FED creates policy to keep export disadvantages-----seniors have had their Social Security gutted these several years by FED and Congressional neo-liberals and Obama---just as had Bush neo-cons been in office.
  
  The article below does a good job incorporating all these economic factors that kill main street.  QE and zero % interest and the FED's claim of zero inflation lowered senior's Social Security COLA's these several years by hundreds of dollars a month.  THIS IS HUGE AND THE LARGEST ATTACK ON SOCIAL SECURITY EVER.  At the same time, Social Security fraud by corporations illegally skirting their share of payroll taxes soared these few decades and never recovered by Obama and Clinton neo-liberals in Congress---and in fact this SS payroll fraud soared these several years.  This makes SS Trust look like it has less funds than it actually does.  The final ax to Social Security will be the US Treasury subpriming of bond sales all over the world to create great national debt just to say----BYE BYE SOCIAL SECURITY AND MEDICARE TRUSTS.
  
  The rising FED interest rates will make inflation soar so costs on main street from credit to food, health care, and home energy and water will as well.  Nothing hurts seniors more than this.  The economic crash and bond market collapse will make interest rates so high on Federal government cost of doing business----that no money can be allocated to social programs or public Trusts and all will go to maintaining vital national agencies----defense, international markets, and Homeland security.
  
  Below you see how Social Security Trust funds are required to be tied to the US Treasury bonds and how Obama and Clinton neo-liberals created policy in 2009 to super-heat and implode this bond market just to end Social Security and Medicare.
  


The Federal Reserve Is Systematically Destroying Social Security And The Retirement Plans Of Millions Of Americans


2075660Michael Snyder
The Economic Collapse
September 19, 2012

Last week the mainstream media hailed QE3 as the “quick fix” that the U.S. economy desperately needs, but the truth is that the policies that the Federal Reserve is pursuing are going to be absolutely devastating for our senior citizens.

By keeping interest rates at exceptionally low levels, the Federal Reserve is absolutely crushing savers and is systematically destroying Social Security. Meanwhile, the inflation that QE3 will cause is going to be absolutely crippling for the millions upon millions of retired Americans that are on a fixed income. Sadly, most elderly Americans have no idea what the Federal Reserve is doing to their financial futures. Most Americans that are approaching retirement age have not adequately saved for retirement, and the Social Security system that they are depending on is going to completely and totally collapse in the coming years. Right now, approximately 56 million Americans are collecting Social Security benefits. By 2035, that number is projected to grow to a whopping 91 million. By law, the Social Security trust fund must be invested in U.S. government securities. But thanks to the low interest rate policies of the Federal Reserve, the average interest rate on those securities just keeps dropping and dropping. The trustees of the Social Security system had projected that the Social Security trust fund would be completely gone by 2033, but because of the Fed policy of keeping interest rates exceptionally low for the foreseeable future it is now being projected by some analysts that Social Security will be bankrupt by 2023. Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years. Yes, you read that correctly. The collapse of Social Security is inevitable, and the foolish policies of the Federal Reserve are going to make that collapse happen much more rapidly.

The only way that the Social Security system is going to be able to stay solvent is for the Social Security trust fund to earn a healthy level of interest.

By law, all money deposited in the Social Security trust fund must be invested in U.S. government securities. The following is from the official website of the Social Security Administration….

By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are “special issues” of the United States Treasury. Such securities are available only to the trust funds.

In the past, the trust funds have held marketable Treasury securities, which are available to the general public. Unlike marketable securities, special issues can be redeemed at any time at face value. Marketable securities are subject to the forces of the open market and may suffer a loss, or enjoy a gain, if sold before maturity. Investment in special issues gives the trust funds the same flexibility as holding cash.

So in order for the Social Security Ponzi scheme to work, those investments in government securities need to produce healthy returns.

Unfortunately, the ultra-low interest rate policy of the Federal Reserve is making this impossible.

The average rate of interest earned by the Social Security trust fund has declined from 6.1 percent in January 2003 to 3.9 percent today, and it is going to continue to go even lower as long as the Fed continues to keep interest rates super low.

A recent article by Bruce Krasting detailed how this works. Just check out the following example….

$135 billion of old bonds matured this year. This money was rolled over into new bonds with a yield of only 1.375%. The average yield on the maturing securities was 5.64%. The drop in yield on the new securities lowers SSA’s income by $5.7B annually. Over the fifteen year term of the investments, that comes to a lumpy $86 billion.

So what happens when the Social Security trust fund runs dry?

As Bruce Krasting also noted, all Social Security payments would immediately be cut by 25 percent…..

Anyone who is 55 or older should be worried about this. Based on current law, all SS benefit payments must be cut by (approximately) 25% when the TF is exhausted. This will affect 72 million people. The economic consequences will be severe.

In other words, it would be a complete and total nightmare.

Sadly, the truth is that the Social Security trust fund might not even make it into the next decade. Most Social Security trust fund projections assume that there will be no recessions and that there will be a very healthy rate of growth for the U.S. economy over the next decade.

So what happens if we have another major recession or worse?

And most Americans know that something is up with Social Security. According to a Gallup survey, 67 percent of all Americans believe that there will be a Social Security crisis within 10 years.

Part of the problem is that there are way too many people retiring and not nearly enough workers to support them.

Back in 1950, each retiree’s Social Security benefit was paid for by 16 U.S. workers. But now things are much different. According to new data from the U.S. Bureau of Labor Statistics, there are now only 1.75 full-time private sector workers for each person that is receiving Social Security benefits in the United States.

And remember, the number of Americans drawing on Social Security will increase by another 35 million by the year 2035.

Another factor that is rapidly becoming a major problem is the growth of the Social Security disability program.

Since 2008, 3.6 million more Americans have been added to the rolls of the Social Security disability insurance program.

Today, more than 8.7 million Americans are collecting Social Security disability payments.

So how does this compare to the past?

Back in August 1967, there were approximately 65 workers for each American that was collecting Social Security disability payments.

Today, there are only 16.2 workers for each American that is collecting Social Security disability payments.

The Social Security Ponzi scheme is rapidly approaching a crisis point.

Sadly, the Federal Reserve has made it incredibly difficult to save for your own retirement.

Millions upon millions of Baby Boomers that diligently saved money for retirement are finding that their savings accounts are paying out next to nothing thanks to the ultra-low interest rate policies of the Federal Reserve.

The following is one example of how the low interest rate policies of the Fed have completely devastated the retirement plans of many elderly Americans….

You can understand the impact of the invisible tax on the elderly by watching the decline of interest income from $50,000 invested in a five-year Treasury obligation. As recently as 2000, this would have yielded about 6.15 percent and an interest income of $3,075 a year. Now the same obligation is yielding 0.7 percent and an interest income of $350 a year. This is the lowest yield on this maturity of Treasury debt since the Federal Reserve started keeping an index of the yields in 1953.

But it’s more than a low interest rate. It’s an income decline of nearly 89 percent in just 12 years.

And after you account for inflation, those that put money into savings accounts today are actually losing money.

Of course most Americans have not saved up much money for retirement anyway. According to the Employee Benefit Research Institute, 46 percent of all American workers have less than $10,000 saved for retirement, and 29 percent of all American workers have less than $1,000 saved for retirement.

Overall, a study conducted by Boston College’s Center for Retirement Research discovered that American workers are $6.6 trillion short of what they need to retire comfortably.

So needless to say, we have a major problem.

Baby Boomers are just starting to retire and the Social Security system is still solvent at the moment, and yet the number of elderly Americans that are experiencing financial problems is already soaring.

For example, between 1991 and 2007 the number of Americans between the ages of 65 and 74 that filed for bankruptcy rose by a staggering 178 percent.

Also, at this point one out of every six elderly Americans is already living below the federal poverty line.

So how bad are things going to be when Social Security collapses?

That is frightening to think about.

In the short-term, millions upon millions of retired Americans that are living on fixed incomes are going to be absolutely crushed by the inflation that QE3 is going to cause.

Just like we saw with QE1 and QE2, a lot of the money from QE3 is going to end up in agricultural commodities and oil. That means that retirees (and all the rest of us) are going to end up paying more for food at the supermarket and gasoline at the pump.

But those on fixed incomes are not going to see a corresponding increase in their incomes. That means that their standards of living will go down.

Things are tough for retirees right now, but they are going to get a lot tougher.

Right now, there are somewhere around 40 million senior citizens. By 2050 that number is projected to increase to 89 million.

So how will our society cope with more than twice as many senior citizens?

Sadly, we will likely never get to find out.

The truth is that our system is almost certainly going to totally collapse long before then.

We are rapidly approaching a financial crisis unlike anything we have ever seen before in U.S. history, and the foolish policies of the Federal Reserve just keep making things even worse.

______________________________________________

We are seeing one Reverse Mortgage advertisement after the other these several years.  As seniors are forced into poverty from lack of employment and fraud against their retirements they are pushed into these reverse mortgage deals.  Don't think that when these policies were created today's FED frauds were not already planned.  With an economic crash tied to the bond market collapse partnered with a rise in FED interest rates will come a ballooning of interest rates on these reverse mortgage deals.  It states----TIED TO CURRENT INTEREST RATES.  Well, if interest rates soar to 25% and higher as is expected with this crash---the equity in homes will be eaten by interest.  So, these loans will not be good the length of life of seniors as they pretend----these loans will default and banks will seize these homes not long after this crash.


Reverse Mortgage Fees and Reverse Mortgage Rates Do Reverse Mortgage Costs Make This Product Too Good to Be True?
New Retirement

All About the Interest Rates on Reverse Mortgages Many people are concerned about the costs associated with a Reverse Mortgage. However, if you want or need equity from your home, are not willing to relocate to a smaller home, don’t want to or are unable to face regular loan payments and are comfortable reducing the size of your estate left to your heirs, then the upfront costs of a Reverse Mortgage should not be a significant issue.

Reverse Mortgage fees are generally only a disadvantage if you intend on moving out of the house in a short period of time. And while Reverse Mortgage interest rates can be high, the fees and interest are not a burden to the homeowner since they are usually financed by the Reverse Mortgage itself (so there are not any out of pocket expenses).

But, no matter how you justify them, Reverse Mortgage costs do indeed amount to a significant sum and so in this article we will help you to understand:


To help explain these details we have created an example of a fairly typical Reverse Mortgage loan. This example shows the Reverse Mortgage loan amounts, charges and interest rates for a 70 year old retiree , with a $200,000 house, and a $50,000 mortgage.

After reviewing this article, use the Reverse Mortgage Calculator to see how much money you could receive from a Reverse Mortgage on your own home.

The Different Types of Reverse Mortgages and How to Choose a Reverse Mortgage Lender There is currently only one Reverse Mortgage type that is widely available – the HECM Reverse Mortgage. This loan can be used to purchase a home or on your existing home. Depending on how you take your loan amount, you can opt for either a fixed rate Reverse Mortgage or a variable rate Reverse Mortgage.

The HUD HECM programs are available from HUD approved lenders. These lenders must adhere to the rules and regulations structured by Congress. The maximum fees and lending limits for the HECM are set by law.

How the HECM Reverse Mortgage Calculates Loan AmountsA HUD-approved lender will determine your actual loan amount by using:

• The loan limit (also known as the lending limit) A lending limit is the maximum Reverse Mortgage loan amount that any home would qualify for.
• The value of your home – as determined by an appraisal
• Prevailing interest rates
• The amount of any outstanding loans against your house
• Your age

Since early 2009, the HECM loan limit nationwide is set at $625,500. As the HECM Reverse Mortgage program is administered by the Department of Housing & Urban Development, legislation may increase (or decrease) this amount in the future.