“It is fantastic that you only have to go to one place. This is so much easier to navigate in just one consolidated handbook.” —Jeffrey Birdsell, an industry expert who helped with the review of the handbook “Our industry has yet to have an updated HECM Handbook since the original was published in 1994,” says Johnson, president of consulting firm All Reverse Pro. Since then, HUD continually released updates in the form of Federal Housing Administration (FHA) information releases, Mortgagee Letters and frequently asked questions, which required lenders to try to keep track of all changes and apply them accordingly. “And hundreds of them have been issued over the years. Having all the information for the HECM product in one consolidated handbook is invaluable.” People can focus on keywords to search the massive document, say Johnson and Jeffrey Birdsell, an industry expert who helped with the review of the handbook. “It is fantastic that you only have to go to one place. This is so much easier to navigate in just one consolidated handbook,” says Birdsell. “You’re searching one document to find something and understand it, and you’re not looking at a whole plethora of documents.” ‘Watershed Moment’ Bill Packer, chief operating officer at Longbridge Financial LLC, is also among those helping to sort through the details. “This marks a watershed moment, with HUD now generally aligning the HECM guidelines with the forward FHA 203(b) program,” Packer says. “There is no area that is not touched by these changes. All parts of the origination, fulfillment, closing, post-closing and servicing have new guidelines to understand—not to mention the changes that will be necessary for our compliance management and quality control programs and our technology systems to support these changes.” Johnson, Packer, Birdsell and others involved with NRMLA have been monitoring the project since HUD started the handbook revision in 2021. At that time, Johnson, who chairs the HUD Issues Committee, created five working groups to review the various sections: the origination/counseling/application process; underwriting/financial assessment/condo/appraisal; HECM for Purchase/HECM refinance; closing/post-closing/ endorsements; and servicing. Each group then made recommendations for HUD to consider when drafting the final handbook. After HUD released the handbook in October, the working groups began going through it again, Johnson says. And, HUD has been willing to consider clarifying language and other tweaks, as needed, before the final April 29 implementation date. “There are a lot of people who have done a lot of work on this, and we’re developing a list of questions to clarify what HUD meant or where there were things in the original handbook that somehow didn’t migrate over to this new one,” Birdsell says. “There are not going to be material changes. But by April, questions will have been submitted, and hopefully, HUD will have responded on as many of them as they can to provide clarity.” Birdsell also points out that people need to keep in mind that the effective date of April 29 is based on the date FHA assigns a case number for a loan. “If you have an FHA case number that is on April 29 or later, then you have to implement all this stuff,” he explains. “You have to start implementing calculations in the software for what you’re doing before then so that when you get that FHA case number, everything that you’ve done will be in line with the April 29 date.” In practical terms, that situation means most companies will have their systems ready much earlier, Birdsell says. And the review process has been ongoing since HUD released the handbook in October, the experts note. “As we come to better understand the changes, there will be complicated components that we will have to HECM Handbook continued on page 30 Elly Johnson Bill Packer Jeffery Birdsell REVERSE MORTGAGE / MARCH-APRIL 2024 29
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