The Department of Housing and Urban Development is still under way with it’s work on a proposed financial assessment and implementation date for reverse mortgage industry requirement, a HUD official said Thursday.
Speaking before attendees of the National Reverse Mortgage Lenders Association Western Regional conference in San Diego this week, Director of Single Family Program Development at HUD Karin Hill told lenders that the agency is making progress on the financial assessment and expects to issue a mortgagee letter in early summer.
“We will be issuing a new mortgagee letter,” Hill said. “Review the ML that was already published. The bulk of that ML is not going to be changing.”
The initial mortgagee letter detailed a financial assessment that is largely the same, Hill continued, though HUD will be making some changes and clarifications around underwriting requirements among other items.
But, she advised lenders, it’s not too early to begin preparing.
“I wouldn’t wait until [the new mortgagee letter] comes out to start working on how that will affect your processes,” she said.
The financial assessment has been under development within HUD for several years, with the fall proposal being the largest development to date. The initial proposal includes documentation of a borrower’s income, credit history and certain debts, detailing stipulations and extenuating circumstances for qualifying borrowers.
HUD is also working on additional reverse mortgage mortgagee letters including updating its tax and insurance policy and expanding guidance for reverse mortgage loss mitigation. The agency is also drafting a proposed rule to codify recent changes and proposing additional HECM origination and servicing policy, Hill said.
Written by Elizabeth Ecker