It’s speak now or forever hold your peace for the reverse mortgage industry, which has only hours left to comment on the latest proposal from the Department of Housing and Urban Development (HUD) on mandatory loan assignments.
Interested persons are invited to submit comments before Monday, September 12 at 11:59 PM (Eastern), if they wish to voice their concerns for HUD’s proposal that would require Home Equity Conversion Mortgages (HECMs) to be assigned to HUD once the loan balance is equal to, or greater than, 98% of the maximum claim amount.
HUD mortgagees currently have the option to assign HECMs to the agency once loans reach this 98% threshold. The proposal stems from a comment HUD received after soliciting public feedback on a broader proposed rule introduced earlier this year.
“The commenter stated that, in some cases, a mortgagee may decline to file a claim in this scenario if the property value has risen rapidly and the loan has an above-market rate,” HUD stated in its notice published in the Federal Register last month.
In order to address this issue, the commenter suggested that HUD require that an assignment claim be made when the loans reach 98% of the maximum claim amount. Taking this suggestion to heart, HUD has been seeking public comment on the feasibility of this proposal as it determines whether to adopt it since August 11.
With only hours left until the comment period ends, just one comment has been submitted as of this writing.
Written by Jason Oliva