HUD Announces New Reverse Mortgage Servicing Contract

The Department of Housing and Urban Development announced officially this week through Mortgagee Letter 12-07 that it has hired a new mortgage servicing contractor for its single family properties, including reverse mortgages.

Irving, Texas-based Deval, LLC is now responsible for Federal Housing Administration Single Family assets including Home Equity Conversion Mortgages (HECMs). Servicers have the option to assign loans to HUD through Deval once they reach 98% of the max claim amount.

Deval took over as HUD’s contractor in March and Mortgagee Letter 2012-07 made the announcement with details this week. Prior to Deval being selected, C&L Service Corporation was HUD’s servicing contractor.

Sources tell RMD that it has been a slow transition with long wait times since Deval began servicing in March.

View the Mortgagee Letter.

Written by Elizabeth Ecker

  • Anonymous

    I wonder why C&L didn’t win the contract, as they had already had gained experience with this product over the past several years?

  • Anonymous

    ReverseGuy,

    Could it be a simple cost issue?  Could it be that as to HECMs the emphasis is more on having a fifty state, DC, and territory termination function than a true servicing function?  

  • Anonymous

    Cynic,

    My comment was somewhat tongue in cheek.  I absolutely agree that it was more than likely a cost issue. 

    I have to wonder if anyone is contemplating what the impact is to having the HECM borrower (whose loan is assigned to HUD) serviced by the lowest cost bidder?

  • Anonymous

    My mother has a HECM that was being serviced by C
    & L Service Corp, they were always so helpful and knowledgeable whenever I needed
    to speak with them regarding ANY issue.  I
    have been dealing with some of the same individuals in the HECM Department for
    the past 5 or 6 years.  Since the
    transfer to Deval (it should be DEVIL) wait times on the phone are ridiculously
    long and IF you actually get to speak with someone, good luck if they know a
    HECM from the Heimlich.  HUD you screwed
    up on this one!!!