The Federal Housing Administration (FHA) announced this week that it plans to issue guidance that will extend the October 3, 2016, effective date for revisions to the previously announced Servicing Fee Set-Aside growth rate for the Home Equity Conversion Mortgage (HECM) program.
Through the publication of Mortgagee Letter 2016-10 on July 13, 2016, FHA established the use of the Note Rate to calculate the compounding interest rate (growth rate) for HECM Servicing Fee Set-Asides for HECM case numbers assigned on or after October 3, 2016.
FHA plans to release an upcoming Mortgagee letter that will supersede the references to the Servicing Fee Set-Aside growth rate effective date only.
“This extension will allow both mortgagees and FHA to complete technology updates needed to operationalize this change,” FHA stated in a memo issued Monday. “Mortgagees should note that all other provisions contained in Mortgagee Letter 2016-10 will remain in effect.”
View Mortgagee letter 2016-10 here.
Written by Jason Oliva