The Department of Housing and Urban Development has updated reverse mortgage financial assessment and property charge guidelines as specified in a mortgagee letter released late Wednesday.
Mortgagee Letter 2016-10 outlines several changes to recent reverse mortgage rules, including an updated Home Equity Conversion Mortgage Financial Assessment and Property Charge Guide; revisions to the compounding interest rate for HECM servicing fee set asides; and an addition of a third-party property tax verification fee to allowable fees and charges.
The revised financial assessment and property charge guide; and the servicing fee set aside changes will become effective for case numbers assigned on or after October 3, 2016, according to the Federal Housing Administration. The third-party property tax verification addition is effective as of July 13.
FHA will offer a conference call for industry members on July 21 as a forum to review the new details, the agency noted in its release.
Following the initial implementation of the reverse mortgage financial assessment in April 2015, many lenders expressed uncertainty about some of the details and a need for more concrete guidelines in some instances.
During its most recent public industry correspondence during the National Reverse Mortgage Lenders Association western meeting in Huntington Beach, Calif., HUD representatives stated that the updates would be forthcoming.
The agency specified additional program changes in May aimed at new consumer protections. These included new disclosures, counseling requirements and a cap on the lifetime interest rate for all adjustable rate HECM loans, among others.
Written by Elizabeth Ecker