Here are the upcoming reverse mortgage events in May:

• May 14 - Trusts and How They Effect Reverse Mortgages w/ All Reverse Transactions (Webinar) Sign Up For Details
• May 19 - Reverse Mortgage Marketing & Sales Ideas w/ Wells Fargo (Santa Ana, California) Sign Up For Details
• May 20 - General Power Of Attorney Questions w/ All Reverse Transactions (Webinar) Sign Up For Details

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Reverse Mortgage Events

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Last week the U.S. Department of Housing and Urban Development published Mortgagee Letter 2008-12 to permit counseling agencies to charge seniors a fee for counseling services. HUD said the counseling fee should be reasonable and customary for the service provided and not exceed $125.  The payment of the fee can be paid using one of the three ways described below:

1. The HECM counseling client and related parties can pay counseling fees directly to the agency; or
2. Lenders may pay HUD-approved counseling agencies for counseling services, through a lump sum or on a case by case basis.  The lender payment may be made directly to the counseling agency or disbursed at closing by the settlement agent, as provided in paragraph (3) below.  The lender payment may be mad e directly to the counseling agency or disbursed at closing by the settlement agent.  Counseling agencies must disclose to their clients any funding or relationships with lenders.  Lenders that pay agencies for counseling services may seek reimbursement from clients who proceed with the HECM and become HECM borrowers.
3. The cost of HECM counseling can be paid out of a HECM borrower’s loan proceeds.  Upon agreement of both the lender and the borrower, the closing agent can assume responsibility for remitting payment to the counseling agency that performed the service.

Lenders are reminded that they may not steer, direct, recommend, or otherwise encourage a client to seek the services of any one particular counseling agency.
To read a copy of the ML 2008-12, click the link below.

Mortgagee Letter 2008-12

Last week NRMLA announced that the Financial Services Committee Chairman Barney Frank (D-MA) planed to bring “The American Housing Rescue and Foreclosure Act” to the House floor for a vote.  NRMLA said the plan was a “rollup” piece of legislation that includes a number of housing related matters, including FHA Modernization.

The legislation includes the recent comprise NRMLA and AARP have reached:

• The position would cap fees at 2% of the first $200,000 of maximum claim amounts plus 1% of the balance thereafter, with an overall cap of $6,000 to be adjusted occasionally for inflation. 
• A national loan limit at the level that is now being proposed in the FHA mod legislation, $550,440.  132% of the GSE Limit. 
• Ability to insure HECMs for the purchase of a 1- to 4- unit property in which the mortgagor will occupy one of the units.
• “Clean-up” of language enacted in the 2000 Housing Act enabling HECMs to be made on co-op units.
• Prohibition on required purchase of an annuity.
• A new requirement for the HUD Secretary to issue regulations to protect borrowers from the marketing of financial and insurance products “not in the interest of such homeowners.”
• A requirement for the Secretary to conduct a study within twelve months of enactment that analyzes and determines the effects of reducing HECM mortgage insurance premiums, taking into consideration costs to borrowers and financial soundness of the program.

Last Thursday the House approved H.R. 3221 by a vote of 266 to 154, more than a dozen “yes” votes short of the two-thirds needed to override a veto.  This is important because President Bush threatened to veto the bill last week when he called it a burdensome bailout that would open taxpayers to too much risk.

But Treasury Secretary Henry M. Paulson Jr., who has been able to work with Mr. Frank in the past, has promised to keep working for a bill that the president would sign, and House Democrats wooed Republican votes by attaching to the Frank bill items that President Bush favors, like an overhaul of the Federal Housing Administration.

H.R. 3221: Foreclosure Prevention Act of 2008