The Compulink Reverse Mortgage topic focuses on Compulink (Compu-Link Corporation), a mortgage servicer specializing in Home Equity Conversion Mortgages (HECMs)–the most common U.S. government-insured reverse mortgage. This guide explains how Compulink operates within the HUD reverse mortgage program, the implications for borrowers and heirs, and what to expect if your HECM is transferred to Compulink servicing.
Who This Mortgage Is For
Seniors aged 62 and older seeking to access their home equity via a government-backed reverse mortgage (HECM) without having to sell the home.
Heirs and estate representatives dealing with the administration or payoff of a HECM loan, especially after the borrower’s death or move from the property.
Borrowers whose reverse mortgage (“HECM”) has reached its principal limit or is assigned to HUD due to servicing, occupancy, or default issues.
Homeowners who need the option for non-recourse, federally-insured mortgages to fund retirement, medical costs, or supplement income on a primary residence.
Key Facts (At-a-Glance)
Item
Details
Loan Purpose
Accessing home equity for eligible seniors; no monthly payments required as long as borrower obligations are met
Fixed or adjustable rates (most HECMs are variable/adjustable, tied to an index)
Term Length
Loan becomes due when the last borrower dies, sells, or permanently leaves home
APR
Varies by program and date of origination; consult loan docs or HUD records for details
Points & Credits
Origination fee and closing costs may apply; see HUD fee schedules for range
Down Payment
None required for a reverse mortgage; in “HECM for Purchase,” down payment is required
Loan-to-Value (LTV)
Determined by borrower age, property value, and rates; max LTV set by HUD, “varies by program”
Debt-to-Income (DTI)
No traditional DTI, but “Financial Assessment” reviews income/assets for tax/insurance payment ability
Mortgage Insurance
FHA HECMs require ongoing MIP; rules for removal or cancellation do not apply
Loan Limits
Conforming HECM limits set by HUD; verify for current limit on official HUD HECM page
Closing Costs
Origination, upfront MIP, servicing set-asides; “sample/illustrative” costs vary by locality
Prepayment Penalty
Not typically applicable to HECMs; verify on closing disclosures
Rate Lock
Generally set at application but confirm with lender; reverse mortgage rates may float until closing
Escrow
Not standard; borrowers must stay current on property taxes and homeowner’s insurance directly or via a set-aside
Pros
No required monthly principal or interest payments as long as borrower obligations (taxes, insurance, maintenance, occupancy) are met.
Non-recourse: cannot owe more than the property’s value at loan settlement, as guaranteed by FHA insurance.
Loan proceeds can be used for any purpose—income supplement, medical expenses, or home repairs.
Heirs may inherit the home or repay the balance, whichever is lower: loan or home value.
Access to equity without selling the home or relocating, supporting “aging in place”.
Cons
Accruing interest and ongoing mortgage insurance premiums may substantially reduce equity over time.
Servicing may transfer to companies like Compulink if the loan is assigned to HUD after reaching the principal limit or due to default/occupancy events.
Failure to pay property taxes, homeowner’s insurance, or maintain the home can trigger foreclosure.
Loan becomes due in full when last borrower dies, sells, or permanently leaves, affecting heirs’ options.
Upfront closing costs and FHA MIP may be higher than some other equity products.
Costs, APR & Amortization
The “interest rate” on a reverse mortgage may be fixed or adjustable. The APR, which includes interest plus fees and MIP, typically exceeds the nominal interest rate.
Mortgage Insurance Premium (MIP) is required on all FHA-insured HECMs. Borrowers pay an upfront premium at closing, plus annual premiums charged monthly over the life of the loan. There is no standard PMI “cancellation.”
Loan balance grows over time due to accrued interest, MIP, and servicing costs. No traditional amortization schedule; the balance is repaid (home sale, payoff, refinance) at maturity due to a “maturity event.”
Property taxes and insurance are not included in the APR but are required ongoing expenses. An escrow-like “set-aside” may be required if financial assessment deems it necessary.
HECM servicing transfers to Compulink typically occur after the loan reaches the “principal limit” or is assigned to HUD; this does not change loan terms, but all communications/payments are redirected to the new servicer.
Representative example (sample/illustrative only):
Example
Loan Amount
Rate
APR
Term
Monthly Principal & Interest
Total Paid
Sample Scenario
$150,000 (initial max draw)
4.5% adjustable
5.7% sample/illustrative
Until last borrower leaves/dies
$0 (no req. monthly payments)
Grows over time based on usage, compounding, MIP, fees
Fixed vs Adjustable (ARM)
Most HECM reverse mortgages are adjustable-rate (ARM), with rates resetting based on an index (often 1-year CMT or SOFR) plus a lender margin. Lifetime and periodic caps limit how much the rate can change at each adjustment and over the loan’s life.
Fixed-rate HECMs exist, but generally offer lower maximum loan proceeds and require a lump sum draw at closing.
For ARMs, borrowers may choose monthly tenure (lifetime), term payments, lines of credit, or combinations, offering flexible access but possible rate fluctuation.
Fixed-rate offers payment certainty, but with fewer payout options and potentially less overall access to equity.
Eligibility, Underwriting & Documentation
Borrower must be at least 62 years old (all borrowers/owners); property must be primary residence, with sufficient equity.
Financial assessment reviews credit history, income, and assets to ensure ability to pay property charges (taxes, insurance, maintenance).
HUD-approved counseling is a mandatory step before application—proof is required.
Appraisal by FHA/HUD-approved appraiser determines property value; liens or title issues must be resolved pre-closing.
Heirs or powers of attorney may be involved if the original borrower becomes incapacitated or dies; different documentation is needed for payoff or estate sale.
Borrowers complete required HUD-approved counseling and receive a certificate to include in the application.
Loan application reviewed; “Loan Estimate” and “HECM Consumer Information” disclosures are provided as required under federal law.
Appraisal, title search, financial assessment, and underwriting are conducted. If all conditions are met, “clear-to-close” is issued, closing is scheduled, and initial funds are disbursed as arranged (lump sum, line of credit, etc.).
After closing, payments to the borrower begin (or line of credit established); servicing may initially be with the lender, then transfer to HUD-assigned servicers like Compulink if certain loan events or maturity triggers occur.
Heirs receive notices of maturity or default and have set periods to repay, sell, or deed the property; foreclosure or HUD claim may follow if unresolved.
Government-Backed & Special Programs
The Home Equity Conversion Mortgage (HECM) is the only federally insured reverse mortgage program in the U.S., administered by HUD and FHA.
HECM for Purchase allows eligible seniors to buy a new primary residence with a reverse mortgage, requiring a down payment and meeting all standard eligibility criteria.
State housing agencies and local nonprofits may offer additional reverse mortgage counseling or support for seniors (confirm with local authorities).
Reverse mortgage interest rates are usually set at application or closing; floating may be allowed but is rare for HECMs.
Discount points are less common than in forward mortgages, but origination fees and initial MIP affect the APR and total cost.
Repricing can occur if application is not processed within scheduled rate-lock period, or if HUD changes program terms.
Lender credits to cover costs are sometimes available, but verify all details on the official closing disclosure.
Refinance & Remortgage Options
HECM to HECM refinances are allowed under HUD guidelines, often to access additional equity due to home value appreciation or to switch rate types; specific seasoning and benefit thresholds apply.
Standard cash-out conventional refinance is not available with a reverse mortgage on the same property; full payoff or sale is needed to exit the HECM.
Streamlining is not typical; full re-underwriting is needed for most HECM refis. Consult official HUD documents for updated policies.
Heirs may repay the loan (often at 95% of appraised value) to keep the home, or arrange sale/refinance after the borrower’s death or permanent move.
Risks & Responsible Borrowing
Equity declines over time as interest and insurance accrue; homeowner or heirs may have less to inherit or use for future needs.
Servicer changes (e.g., loan transfer to Compulink after assignment to HUD) can cause confusion or missed deadlines for communications—monitor mail and statements closely.
Failure to maintain the property, keep up with taxes and insurance, or live in the home triggers foreclosure risk and loan acceleration.
Reverse mortgage may not be suitable if heirs wish to keep the home or if alternative equity options are available.
Alternatives & Comparisons
Side-by-Side Comparison
Feature
Compulink Reverse Mortgage (HUD-assigned HECM)
Fixed-Rate HECM Alternative
HELOC/HELOAN (Forward)
Rate Type
Typically adjustable (subject to HUD/FHA terms)
Fixed, single lump sum at closing
Usually variable, can be fixed for term loans
Down Payment
None, unless HECM for Purchase
None, unless HECM for Purchase
Not applicable (draw on equity, not reverse)
Insurance (PMI/MIP)
Mandatory FHA MIP, upfront + annual
Mandatory FHA MIP applies
PMI may apply if LTV high (traditional loans), no FHA MIP
