HUD seeks comments on update to HECM policy
On November 9, FHA posted a proposed update to its Home Equity Conversion Mortgage (HECM) policy. According to FHA, the proposal “enables certain categories of… HECMs that were previously ineligible for assignment to be assigned to HUD… This change will support servicer liquidity and strengthen the HECM market for senior homeowners.” Under current HECM policy, mortgage servicers can assign a HECM to HUD “when the mortgage reaches 98 percent of the Maximum Claim Amount and… an eligible borrower or non-borrowing spouse is residing in the property.”
The draft mortgage letter “proposes to expand the assignment eligibility criteria to include HECMs that are due and payable resulting from the death of all borrowers and non-borrowing spouses.” A redline of the proposed language of the updated HECM Assignment Eligibility can be found here. FHA seeks comments on its proposal through December 11, 2023, using the Feedback Response Worksheet download here, and can be sent to email@example.com.