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Posts Tagged ‘HUD’
Wednesday, November 4th, 2009
 With the 2009 fiscal year ending on September 30, this month’s HECM volume report revealed a new list of the top 10 reverse mortgage lenders, very much changed from that of last fiscal year. The list is below, compared to that of 2009 FY. However, given how close many of the lenders are to each other in terms of the number of HECMs they endorsed, it is by no means clear how the list will shake out over the next few months.
October 2009:
1. Wells Fargo
2. Bank of America
3. MetLife Bank
4. Financial Freedom Acquisition
5. One Reverse Mortgage
6. 1st AAA Reverse Mortgage
7. First Mariner Bank
8. Security One Lending
9. Harvard Home Mortgage
10. Stay in Home Mortgage
Fiscal Year 2009:
1. Wells Fargo
2. Bank of America
3. World Alliance Financial Corp
4. Financial Freedom
5. One Reverse Mortgage
6. MetLife Bank
7. Countrywide Financial
8. Generation Mortgage
9. Urban Financial Group
10. 1st AAA Reverse Mortgage
Thus, from last year’s top 10, only 6 remain in the top 10 for October. The complete list for October can be found on the HUD website. The changes will also be reflected on the Reverse Mortgage Guides website in the Lender Directory in the near future.
Tags: 1st AAA Reverse Mortgage, 2009 FY, Bank of America, Countrywide, financial freedom, First Mariner Bank, generation mortgage, Harvard Home Mortgage, hecm, hecm volume, HECM volume report, HECMs, HUD, list, MetLife, One Reverse Mortgage, reverse mortgage, reverse mortgage lender, reverse mortgage lenders, reverse mortgages, Security One Lending, Stay in Home Mortgage, top 10 list, Urban Financial, wells fargo, World Alliance Financial Corp
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Friday, October 23rd, 2009
 HUD released the long awaited new RESPA FAQs this morning. The document contains many common questions and answers about complying with RESPA.
RESPA, the Real Estate Settlement Procedures Act first passed in 1974, is the source of many of the basic federal reverse mortgage required disclosures, including the HUD-1 statement and the Good Faith Estimate (GFE). Most of the questions in the RESPA FAQs released this morning address the HUD-1 and GFE. There is also a specific section on reverse mortgages.
RESPA Rule FAQs
Tags: FAQs, GFE, HUD, HUD-1, Real Estate Settlement Procedures Act, RESPA, reverse mortgage, reverse mortgages
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Thursday, October 22nd, 2009
 After already announcing a delay of the implementation of Mortgagee Letter 2009-19 to case numbers assigned on or after November 2, 2009, the Reverse Review reported today that HUD has delayed the implementation further. Guidance is expected from HUD in the next two weeks clarifying Mortgagee Letter 2009-19 and offering additional leniencies to address the difficult current market conditions. The changes will then go into effect on December 7, 2009.
For those who forgot, Mortgagee Letter 2009-19 changed the condominium approval process and condo unit eligibility for reverse mortgages. The Mortgagee Letter can be found at Mortgagee Letter 2009-19.
Tags: condo, condominium, HUD, mortgagee letter, reverse mortgage, reverse mortgages
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Thursday, October 8th, 2009
 NRMLA President Peter Bell testified in front of the House Subcommittee on Housing and Community Development today as part of a panel of witnesses on the future of the FHA. While Commissioner Stevens’ statements were written up in the New York Times, Bell’s comments provided a number of interesting anecdotes on the state of the reverse mortgage industry.
Bell talked about the risks to both borrowers and lenders. Borrowers risks include finding out they do not have enough money to remain in the home due to property taxes and insurance. These issues, which we have covered extensively in the past few weeks, only effect 2% of borrowers, and efforts are underway to help mitigate those risks. Lenders risks include being stuck funding a loan that is unable to get a certified by HUD. HUD is reducing this risk, by decreasing the Principle Limit Factors last week, and eliminating the need for a credit subsidy to the reverse mortgage program.
However, Bell’s main purpose in his testimony appeared to be to convince the House Subcommittee to extend the current reverse mortgage limits and to ultimately return to the prior Principle Limit Factors. HECMs have had a net gain of 7 billion dollars in the course of the program, and Bell argues that reverse mortgages have not played a role in the FHA’s recent capital reserve problems. Reverse mortgages are expected to operate on a break even or better basis in the future.
Furthermore, recent changes to the program will impede the ability of seniors to get a reverse mortgage. Over 20% of reverse mortgage borrowers in the last year would not have qualified if the Principle Limit Factors had been reduced to their current levels when they applied for the loan. New technology has reduced costs for lenders, and Bell maintains that the numbers used by the Office of Management and Budget (OMB) are not realistic, since the average lifetime of a reverse mortgage loan is 7 years regardless of the age of the borrower. Older borrowers average the same length of time with a reverse mortgage as younger borrowers. Bell was passionate that the reverse mortgage program has been self-sustaining and will continue to operate as such.
Tags: borrowers, FHA, House subcommittee, HUD, lenders, New York Times, NRMLA, OMB, Peter Bell, principle limit factors, reverse mortgage, reverse mortgages
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Monday, October 5th, 2009
 September’s HECM volume report as published by HUD (U.S. Department of Housing and Development) showed that the number of HECMs endorsed increased by about 500 loans from August to September. The number of HECMs endorsed in September was 9,473, while 8,933 HECMs were endorsed in August. However, this number does not reflect the dramatic increase in the number of case numbers assigned the last week in September during the final days of the former PLF limits. As such, the number of HECMs endorsed should rise rapidly in October and November, as they are processed and closed.
In the meantime, the HECM lenders in the top 10 remained unchanged from August. These top 10 lenders are measured by the total number of HECMs endorsed so far this year, explaining why some lenders that have left the reverse mortgage business are still in the top 10. The list is as follows:
1. Wells Fargo
2. Bank of America
3. World Alliance Financial Corp
4. Financial Freedom
5. One Reverse Mortgage
6. MetLife Bank
7. Countrywide Financial
8. Generation Mortgage
9. Urban Financial Group
10. 1st AAA Reverse Mortgage
It will be very interesting to see if this list changes in the next two months as the number of HECMs endorsed increases dramatically. The complete list for September can be found on the HUD website. The changes will be reflected on the Reverse Mortgage Guides website in the Lender Directory within the next week.
Tags: 1st AAA Reverse Mortgage, August, Bank of America, Countrywide, financial freedom, generation mortgage, hecm, HECM volume report, HECMs, HUD, MetLife, One Reverse Mortgage, PLF, reverse mortgage, reverse mortgages, September, top 10 list, Urban Financial, wells fargo, World Alliance Financial Corp
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Wednesday, September 23rd, 2009
 HUD just announced today that effective October 1, 2009, the principal limit factor (PLF) on reverse mortgages will be reduced by 10%. The new PLF table can be found at: http://www.hud.gov/offices/hsg/sfh/hecm/hecmhomelenders.cfm. This PLF table will go into effect for all loans taken on or after October 1, 2009.
These changes to the principal limit are not a large surprise, given the appropriations bills now going through Congress. The reverse mortgage program was not designed to be supported by a credit subsidy, and since the appropriations bill is also unlikely to grant a subsidy, program changes are the only way to keep the reverse mortgage program operating in the new fiscal year (which begins October 1, 2009). Nonetheless, these changes are not likely to be embraced by the reverse mortgage community, as they will prevent some seniors from receiving the amount of money from their homes necessary to be eligible for the program. A reverse mortgage was designed to help as many seniors as possible. This is likely to reduce their ability to do so.
The mortgagee letter can be found below:
Mortgagee Letter 09-34
Tags: appropriations bill, breaking news, FHA, HUD, mortgagee letter, October 1, principal limit, principal limit factor, reverse mortgage, reverse mortgage program, reverse mortgages
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Tuesday, September 15th, 2009
 In June, HUD released new guidelines for condominium approval for reverse mortgages. The guidelines were supposed to go into effect on October 1st. However, HUD has now announced that the new guidelines will only apply to case numbers assigned on or after November 2, 2009.
The mortgagee letter can be found at Mortgagee Letter 09-19ml, in case anyone needs a reminder as to the new HUD guidelines. The delay in implementation makes one wonder whether, if the new co-op eligibility requirements are ever announced, they will go into effect as scheduled.
Tags: condo, condominium, guidelines, HUD, mortgagee letter, reverse mortgage, reverse mortgages
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Wednesday, September 2nd, 2009
 The FHA released a final rule today that made the new HECM counseling standards official. The rule goes into effect on October 2, 2009.
Among the new standards, the rule establishes standards for certification testing for HECM counselors and a national Roster of HECM counselors. The final rule establishes that:
1. HECM counselors who have passed the exam by October 2, 2009 will be automatically included in the HECM counselors Roster.
2. HECM counselors who have been removed for the Roster may apply for reinstatement by explaining in writing how the deficiencies that were the cause of their removal have been addressed and how their program has been improved so as to warrant reinstatement of the counselor.
3. To be eligible for the HECM counselor Roster, counselors must not be listed on any of the following lists: General Services Administration’s Suspension and Debarment List, HUD’s Limited Denial of Participation List, or HUD’s Credit Alert Interactive Response System.
4. Counselors have a 30 day period to submit a written appeal of their proposed removal from the Roster.
5. A counselor may be removed for a maximum period of one year.
Counselors will be tested every 3 years to remain on the Roster and must complete continuing education requirements.
The final ruling can be read in its entirety as it appears in the Federal Register. Hopefully the ruling will help improve the HECM counseling process.
UPDATE: The FHA HECM counseling protocols have yet to be released. An update will go out when it is published. The Final Rule published today only covers the HECM counseling Roster and the standards that accompany it.
Tags: counseling standards, exam, FHA, final rule, hecm, HECM counseling, HECM counselor, HECM counselors, HUD, reverse mortgage, reverse mortgages, Roster
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Wednesday, August 26th, 2009
 The Office of the Inspector General (OIG) found Bank of America’s HECM Servicing Division to be out of compliance. The OIG alleged that Bank of America did not comply with two important HUD requirements in its servicing of reverse mortgages. It did not maintain the annual certifications of the borrower’s residency, and it failed to notify HUD in a timely manner when the reverse mortgages became due and payable as a result of the death of the borrower. One reverse mortgage loan file also did not contain an appraisal.
Bank of America disputes the findings of the OIG. Their main objection appears to be that many of the loans in question were not being serviced by Bank of America when the loan was completed or when the borrower passed away, and rather are files that have since been acquired by Bank of America when Bank of America acquired the Seattle Mortgage Company in April 2007. The OIG responded that the acquiring servicer is responsible for receiving the complete file from the prior servicer. Another Bank of America objection is that many of the certificates of occupancy could be found through online methods, while the OIG only reviewed the hard copy files. The OIG responded that while there was a written procedure, it did not appear to always be followed, and the occupancy certificates need to be retained.
A complete copy of the report, including Bank of America’s response, can be found below:
OIG Audit Report of Bank of America
Tags: audit, Bank of America, compliance, hecm, HUD, loan, loans, Office of Inspector General, OIG, procedure, reverse mortgage, reverse mortgages, servicing
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Tuesday, August 25th, 2009
 HUD announced that a new mortgagee letter will be coming in the next 60 days. The mortgagee letter will likely be about advertising, as HUD is apparently not pleased with advertisements that promote borrowers using the proceeds from a reverse mortgage for a vacation or expensive personal items.
However, reverse mortgage proceeds are for the borrower to spend at their discretion. While HUD has been very suspicious of borrowers using reverse mortgage proceeds for annuities or other insurance products, there is nothing to keep them from doing so. Further, a recent article actually promoted seniors putting money from a reverse mortgage into life insurance policies so as to be able to pass the money to their heirs tax-free–an interesting way to use a reverse mortgage for estate planning.
Ads in other countries with similar reverse mortgage programs also use advertising focusing on a vacation or luxury item. The philosophy is that the money is the senior’s to use at their discretion. These are some ways a senior might choose to do so. As a result, it will be very interesting to see what (if any) guidelines on advertising HUD releases with the next round of mortgagee letters. While a reverse mortgage is a loan like any other and does need to be taken seriously as a financial investment, one hopes seniors are still free to take out a reverse mortgage– regardless of whether they take it out for something serious (medical expenses, home repairs) or something more luxurious (yacht, vacation, car).
Tags: advertising, financial investment, hecm, HECMs, HUD, mortgagee letter, mortgagee letters, reverse mortgage, reverse mortgages, senior
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