The Department of Housing and Urban Development (HUD) announced today that it is delaying the implementation of the financial assessment.
The announcement, issued Friday afternoon via Mortgagee Letter 2013-45, states HUD will be delaying the effective date for the financial assessment requirement for new Home Equity Conversion Mortgage (HECM) case numbers that are assigned on or after January 13, 2014.
While HUD did not give a specific date as to when the financial assessment will take effect, it did indicate that it will issue new guidance that will be effective for HECM case numbers assigned no sooner than 90 days from the date of that mortgagee letter.
The delay arrives a month following an announcement from the Federal Housing Administration (FHA) saying it would grant an extension for lenders before the financial assessment would go into effect.
The industry expects the guidance will require that lenders consider both a borrower’s willingness and capacity to pay his or her loan obligations, including tax and insurance associated with the property.
Written by Jason Oliva