| HECM-Rescission of ML 2008-38 – Borrower’s Recourse for Repayment of HECM Debt- Replaced with ML 2011-16 — Reverse Mortgage May 2011
In an attempt to derail a pending lawsuit by the American Association of Retired Persons (AARP), the Department of Housing and Urban Development (HUD) rescinded ML 2008-38. AARP claims that foreclosing on a property encumbered by a HECM loan and displacing a non-borrowing spouse who can’t pay the loan amount in full due to a market value decline, is a violation of HUD’s “Safeguard to Prevent Displacement of Homeowner” statute. HUD will lose a ton of money if they lose the lawsuit. It’s a no-win dealio.
(Mortgagee Letter 2011-16, Home Equity Conversion Mortgage-Rescission of Mortgagee Letter 2008-38-Borrower’s Recourse for Repayment of HECM Debt, April 5, 2011)
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| FHA HECM (Reverse Mortgage) HUD-1 Revises Closing Certification – ML 2010-39. [Download Charts/Checklists: Addendum to HUD-1 Settlement Statement HECM Refinance & Purchase Form]
— December 2010
This affects processing & closing. Print out the attachment for verbiage required and find out whether your closing document software will update to this language automatically, or whether it will have to be a manual function. Notice of Rejection will be issued if this new certification isn’t used.
(Home Equity Conversion Mortgage (HECM) – HUD-1 Settlement Statement Closing Certification, Mortgagee Letter 2010-39, November 19, 2010)
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| FHA HECM - Clarification of Policies When Providing HECM Borrowers List of Counseling Agencies – ML 2010-37 (Effective 2-1-11) — December 2010
HECM lenders must complete the FHA Connection screen entitled HECM Referral List Update prior to loan insuring. HUD asks that this screen be completed within one day after the FHA case number has been ordered. Recommend that you take a screen shot for your files.
(Home Equity Conversion Mortgage (HECM) Program: Clarification of Policies Regarding the Requirement that HECM Lenders Provide Prospective HECM Borrowers a List of HECM Counseling Agencies, Mortgagee Letter 2010-37, November 8, 2010)
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| FHA Reverse Mortgage - HECM Saver – More Affordable MIP – ML 2010-34 (Effective 10-4-10) — October 2010
The new HECM Saver option will substantially reduce the MIP costs to borrowers. This is a whole new marketing opportunity for this program—both purchase and refis.
(Mortgagee Letter 2010-34, HECM Program – Introducing HECM Saver; Mortgage Insurance Premiums and Principal Limit Factor Changes for HECM Standard)
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| FHA Revisions to Model Home Equity Conversion Mortgage (HECM) Loan Agreement – ML 2010-07 – [Download 5 Updated HECM Forms.] (Effective 8-1-2010) — March 2010
If you haven’t been using Form 1009 as your HECM loan application now is the time to get into the habit. Just don’t “throw the baby out with the bathwater” and forget you still have to include the FHA/VA Addendum Form 92900-A that we normally associate with the URLA Form 1003. [Download 5 Updated HECM Forms.]
(Mortgagee Letter 2010-07, March 1, 2010)
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| Home Equity Conversion Mortgage Program: Subordinate Liens – ML 2009-49 Clarifies ML 2006-20 — December 2009
I had to shake my head at the fact that 2006-20 was written as “clarification” guidance. Now we have a new ML that “clarifies” the “clarification”. Outside of the exceptions listed, you can’t create a NEW lien during the process of obtaining a HECM.
(Home Equity Conversion Mortgage Program: Subordinate Liens, Mortgagee Letter 2009-49, November 18, 2009)
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| Reverse Mortgage: Home Equity Conversion Mortgage (HECM) - Limits Principal Balance Withdrawals. — October 2009
New factors reduce the amount of loan proceeds available to HECM borrowers. Its HUDs attempt to pull the HECM program out of a free-fall of losses due to declining home values.
(FHA Mortgagee Letter 2009-34)
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| Reverse Mortgage Application Form 1009 Updated (Effective January 1, 2010) — August 2009
Suggest that you read the new form in its entirety, as there are some major legal changes—including the “investment question”. At this time, it’s not known what HUD plans to do with the info when the application answers Declaration # J.
(Fannie Mae Legal Document Updated Form 1009 – July 20, 2009)
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| FHA Clarifies & Corrects - Home Equity Conversion Mortgage (HECM) Refinancing of Existing Loans (Includes: HECM Anti-Churning Disclosure & “How to Calculate Total Cost of Refinancing HECM) — July 2009
Okay HECM folks. There you have it. Out of the 5 pages of info in this Mortgagee Letter the stuff I outlined is the NEW stuff. The rest is a repeat of ML 2004-18. Print out the ML and all the attachments. This is your new refinance bible.
(Mortgagee Letter 2009-21 – Home Equity Conversion Mortgage Refinancing of Existing Loans)
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| FHA Home Equity Conversion Mortgage Program: Clarification of Counseling Issues (Effective March 27, 2009) — May 2009
HUD ‘s not happy that borrowers are being pressured by lenders into pursuing the HECM, especially since the borrowers are older and possibly more susceptible to unscrupulous tactics.
(FHA Mortgagee Letter 1009-10, March 27, 2009)
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| FHA HECM for Purchase Program: Guidelines Clarified (Effective March 27, 2009) — May 2009
This is a summary of everything that is different from the original ML 2008-33. If you have anything to do with purchase HECMs you will want to print out this new ML and the attachment and keep it for reference. It is your only guideline reference specific to purchase HECMs.
(FHA Mortgagee Letter 2009-11, March 27, 2009)
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| The New Niche: Purchasing a Home Using a Reverse Mortgage (HECM) (Mortgage Talking Points® Flyer Included) — January 2009
Talk about an untapped niche - this just might be your ticket to staying in the business for the long haul! If you offer FHA, re-read the 2 previous articles (listed in this article), print the Mortgage Talking Points® Flyer "How to Create More Sales With Reverse Mortgages" and get your rear out there and be the first on your block to teach Realtors® how to build (or re-build) their businesses!
(ML2007-06: Home Equity Conversion Mortgage Program - Existing Property Eligibility Requirements / ML2008-34: All FHA Approved Mortgagees, All HUD-Approved Housing Counseling Agencies)
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