Servicing Corner Why Completing Required Repairs ASAP Is Important Loan Officers Can Help Ensure a Smooth Process WHEN A NEW reverse mortgage closes, the appraiser and underwriter may have identified repairs to the property that are required to be completed to bring the property into compliance with the Federal Housing Administration (FHA) or investor standards. When this occurs, a portion of the loan funds available to the borrower are put in a repair set aside (RSA) to be used throughout the process to complete the repairs. Shortly after the loan is boarded with the servicer, they will send an introductory instruction letter to the borrower and continue to work closely with the borrower throughout the process. The borrower, in turn, should provide regular updates to the servicer about the progress. What Is the Deadline Date to Complete Repairs? Generally speaking, borrowers have up to 12 months after the loan closing date to complete those repairs, which are outlined on the repair rider to their loan agreement. Repairs listed in the rider are required to be completed by 34 REVERSE MORTGAGE / MARCH-APRIL 2024
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