How the Lender Participates and Makes Money

• Any FHA-approved lender may originate HECM loans.

• Lenders earn an origination fee and either earn servicing fees or sell servicing rights to other companies.

• Fannie Mae purchases HECM loans, and several companies offer loan servicing systems or services.

• Lenders are protected against loan losses that occur because the nonrecourse feature limits how much a borrower must repay.

• HECM loans may be assigned to HUD when the total loan balance equals 98% of the Maximum Claim Amount.

• HECM insurance benefits may equal up to that amount