In an effort to streamline the Home Equity Conversion Mortgage claim payment process, the Federal Housing Administration announced Monday that it has updated requirements for servicers assigning loans back to the FHA for processing.
Effective upon release, Mortgagee Letter 2018-08 gives FHA-approved servicers more alternatives when it comes to required supporting documentation for their loans that have reached 98% of their maximum claim amounts. FHA said that by “relaxing the documentation burden” during this process, the FHA can achieve more timely claims payments to the servicers.
“Streamlining the HECM claim payment process makes us more responsive to participating lenders and helps continue our effort to put the program on a more financially viable path,” FHA Commissioner Brian Montgomery said in a statement about the changes.
Listed under the “Summary of Changes” in the mortgagee letter is documentation regarding Evidence of Current Hazard Insurance, Alternative Evidence of Death of Borrower, Clarification of “Current” Taxes, Evidence of Completion of Required Repairs, Clarification Regarding Mobile Home Title, Timeframe for Filing Claim Following Preliminary Title Approval, Pre-Due and Payable Corporate Advance.
Written by Maggie Callahan