Friday Round-Up: FHA Revamps Lender Approval, Counseling Troubles Lie Ahead

In case you missed it, here’s what happened in reverse mortgage news this week:

HUD rehashed its FHA lender approval requirements. Several changes to the requirements, announced in Mortgagee Letter 2011-34, have the potential to level the playing field for lenders—especially those with call centers. No longer restricted by state lines, some lenders told RMD they see new expansion opportunity as a result of the changes.

HECM counseling began to feel the crushing effects of no HUD funding. Counseling agencies reported that wait times for borrowers who don’t pay upfront have doubled to several weeks out. One large counseling agency will discontinue its free counseling on Monday as a result of the funding cuts.

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Headlines touted cases of mortgage fraud. Reports that mortgage fraud has doubled over the past year circulated among headlines of reverse mortgage fraud schemes in several states. Fraud reports are on the rise, reports stated, from activity conducted over the past two years and not necessarily the immediate past.

Lenders reported that lack of experience is their biggest hiring hangup. Despite the worst job market in decades and no shortage of applications, some mortgage lenders are finding that the current job market is presenting new challenges, including lack of experienced applicants.

…and RMD talked about big bank exits with industry experts. We set out to find out: which bank exit cut deepest? Read our account to find out.

Written by Elizabeth Ecker

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