Hultquist pointed out that misconceptions about prepayments impacting the reverse mortgage line of credit persist, emphasizing that payments go to mortgage insurance first before the credit can increase.
McMinn illustrated a common misunderstanding among customers regarding prepayments in reverse mortgages, stating that although they reduce loan balances, they also affect the accessibility of the line of credit due to servicing rules.
Hultquist stressed the importance of understanding the servicing waterfall in reverse mortgages, explaining that partial payments do not directly translate to an equal increase in the line of credit.
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