HW Media connects and informs decision makers across the housing economy. Professionals rely on HW Media for breaking news, reporting, and industry data and rankings. Moving the Housing Market Forward.
FHANewsReverse Mortgage

New HUD Settlement Statement for FHA Reverse Mortgages Released

The Department of Housing and Urban Development published Mortgagee Letter 2010-39 to introduce a revised HUD-1, settlement statement (HUD-1), closing certification on Tuesday.

According to HUD, the certification language has been changed to include new statutory authority to impose penalties for false certifications or fraudulent activities and new language for sellers of a HECM for purchase transaction.

“On the day of loan closing, the HECM mortgagor must certify the source of cash, or its equivalent, used for the monetary investment or closing costs was not provided by the seller, or any other person or entity that financially benefits from the transaction,” said HUD in the letter.  “Likewise, the seller must certify the HECM mortgagor will not be paid or reimbursed for any part of the monetary investment or closing costs before, during, or after loan closing.”

The ML also replaces the language found in paragraph 6-9(g) of HUD Handbook 4235.1, REV-1, which is required for HECM traditional and refinance transactions.

The new certification language must be used for all HECM case numbers assigned on or after December 1, 2010.