Following the April implementation of the reverse mortgage financial assessment and recent non-borrowing spouse rule changes, the Department of Housing and Urban Development is providing guidance for reverse mortgage counselors as to their requirements regarding the program updates.
Through a notice distributed last week, HUD reminded Home Equity Conversion Mortgage counselors of the changes implemented in recent Mortgagee Letters 2014-22, which outlined the financial assessment changes and property charge guide, as well as changes to non-borrowing spouse rules.
The department also updated requirements for counselors on the various changes, including seasoning requirements, mandatory obligations, property charge funding requirements, financial assessments and non-borrowing spouse changes.
Counselors must review the new rules and counsel borrowers accordingly, HUD says, noting several specifics.
With respect to financial assessment changes, “the HECM mortgagee, not the HECM counselor, is responsible for performing the Financial Assessment …as well as determining whether a Life Expectancy Set-Aside will be required,” HUD states in the notice.
In terms of counseling software, the Reverse Mortgage Analyzer software has been updated, and is still required for use among counselors. The update does not change the requirement for counselors to utilize the Financial Interview Tool (FIT).
Written by Elizabeth Ecker