Wholesale reverse mortgage lenders continue to eliminate their HECM Advisor program due to HUD officially killing it with their recent mortgagee letter. There are plenty of people who used the program responsibly but many feel the HECM advisor program was to blame for some of the problems our industry has faced with unscrupulous lenders. Overall I think the elimination of the program in a good sign because it shows that HUD is starting to implement provisions from the housing Bill that was signed into law in July.
I’ve seen announcements about discontinuing the program from Countrywide, Senior Lending Network, Bank of America, and Liberty. According to the alert from Liberty:
We will not allow any Advisory Fee to be paid out of escrow for a non-FHA approved Partner under the HECM Advisor Program unless the loan has an FHA case number before October 1, 2008.
Other lenders are taking the same stance. Effective October 1, 2008, ML 2008-24 restricts the origination of HECMs to
- FHA-approved loan correspondents/sponsors
- FHA-approved mortgagees through their retail channels
- FHA approved lender working with another FHA approved lender
RIP HECM Advisor.