HUD Pushes Back New Reverse Mortgage Technology Release

Finding anyone using a computer system developed over 20 years ago is no easy task, unless you take a look at the technology powering the the Department of Housing and Urban Development’s reverse mortgage program.

Created in 1989, the Insurance Accounting Collection Systems (IACS) was developed as a prototype for the Home Equity Conversion Mortgage (HECM) pilot program.  This “antique” has been the backbone of the HECM program ever since.

HUD was expected to roll out the second generation system – HERMIT – in November, but the agency is pushing it back until March or April of next year according to people briefed on the decision.

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RMD spoke with one of the developers behind the system and learned HUD wants to get everything right with HERMIT.  “HUD likes the progress that has been made but they just don’t want to rush it out,” said the developer.  “By pushing it back, we can perform additional development and testing that is needed to make sure everything runs smoothly when it’s launched.”

Other companies we spoke to are all very supportive of HUD’s decision.

HUD awarded a $32 million contract to upgrade the software in October 2009 to Quality Software Services, which partnered with CoTs, GTBS, Walker and Company, and Reverse Mortgage Solutions (RMS) to build the system.

The new web based software is powered by STORM, a servicing platform developed by RMS that can handle the increasing demand for HECM loans and provide one solution to support the entire process. According to HUD’s statement of work, the system currently being used is a time consuming and manual processes because the data resides across a variety of different platforms.

They new system will also help “improve overall monitoring and oversight over the various stages of the products life cycle,” said HUD.

HUD did not respond to RMD’s request for comment.

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  • How does this relate to the RMD article published September 20th on cost reduction?

    What I am reading is nothing new for most programmers. It always seems that no matter how much time they are given, “if we just had a little more time….” They are talking about seven months! That seems a little over the top. This reminds me of the programming story in Jurassic Park.

    What will the story be in April 2011 — just 4 months then “to get it right”? Someone at HUD needs to take control of this, put their feet to the fire, and force them to get the same job done with the same quality in a much shorter timeframe.

      • Admin,

        Other than peripherally, I have never been involved with a producer of off-the-shelf software. However, for several years I worked for an entity which provided proprietary software and which spent millions annually on designing and implementing proprietary software both internally and through contractors. That was especially true in the mid 80s. I am still a significant shareholder in a software consulting enterprise.

        This seems more like a proprietary software project. Managing these projects from the consumer point of view is more a matter of avoiding delays and denying excuses. As the consumer, we knew no matter what the source, we would hit delays. It is a chronic part of the software development process. But to hear that the start up will be delayed for seven months for testing and improvements seems more in the realm of Jurassic Park.

        The HECM program needs to be better controlled especially when hearing that HUD is still estimating the number of HECMs in technical default and has very weak, if any, tracking in place. Getting this program online seems to be a part of that process. HUD needs to stick the feet of the contractors to the fire to significantly reduce these delays even if it is just two months. That is what good management does.

        Maybe I have it wrong but from the contents of a few short paragraphs and no comment by HUD, that is what looks like is going on.

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