HECM Endorsements Halted During Partial Government Shutdown

Home Equity Conversion Mortgage insurance endorsements are being halted as a result of the partial U.S. government shutdown that began on Saturday, according to a notice sent by the Federal Housing Administration (FHA) on Wednesday morning.

Due to a lapse in appropriations, the shutdown entered its fifth day on Wednesday. Until further notice, the FHA Office of Single Family Housing and its mortgage insurance program will be operating with limited services, the FHA stated. While HECM payments to borrowers will continue during the shutdown, insurance endorsements will not be made for HECM or Title I loans, FHA stated. Additionally, HECM Collateral Risk Assessment issue assistance will not be available during the shutdown.

“If the appraisal was completed under the Interim Protocols, the appraisal and loan processes must continue under the Interim Protocol path,” the FHA notice states. “If the appraisal is subject to the Fully-Automated Protocols, it must follow those processes through endorsement.”

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Customer service will remain available with limited staff assistance, while other services will not be available such as annual lender recertification, lender approval application approvals, and quality assurance processes for single-family loans.

View the full list of services that are available and unavailable via HUD’s Contingency Plan for Possible Lapse in Appropriations.

Written by Elizabeth Ecker

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  • In a December 21, 2018 article Reverse Review, the following is stated: “RMI President John Lunde told HousingWire that if October’s data continued the decline seen in September, it might be a sign of trouble. But instead the month closed out with positive gains, indicating that September’s dip was simply a reaction to word of possible program changes and not a sign of true distress.”

    The story was posted in late December when we have known for three weeks that the November 2018 endorsement count was the worst in 14 years at 2,553. The lender vendor is now known for trying to provide a positive spin when it is already known that the situation is much, much worse. The article went on to tell readers: ” The latest HECM Originators report from analytics provider Reverse Market Insight shows that endorsements were up 7.4% to 3,087 loans in October.”

    BUT we know that when compared to the October 2018 endorsements, the November 2018 endorsements were down 17.3%. Compared to the lowest monthly endorsement total in fiscal 2018 (June 2018 at 2,838) November 2018 is 10% lower.

    THEN AGAIN, let us look at October 2017 and compare its endorsement total to that for October 2018. This fiscal year’s first month is 31.3% LOWER than last fiscal year’s first month.

    The lender vendor seems to only look at month-to-month numbers and cherry picks for numbers that show positive results when things overall are only getting worse. We need our numbers reported by those who have an independent view, not those whose livelihood is materially or principally provided by the lenders of this industry.

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