The Federal Housing Administration this week consolidated existing policies used by servicers when submitting HECM assignment requests through the Home Equity Reverse Mortgage Information Technology (HERMIT) system. Reverse mortgage servicers have the option to assign loans to FHA as a Claim Type 22 when the loan balance reaches 98 percent of the maximum claim amount. When loans are assigned, FHA takes responsibility for servicing them until a maturity event occurs.
FHA explained in Mortgagee Letter 2017-05 that by consolidating this information into one source, it is making it easier for servicers to locate information needed to submit a HECM assignment request. “This, in turn, may help improve accuracy of HECM claim submissions and improve processing times for claim requests; thus, contributing to the overall goal of making it easier to do business with FHA,” stated Mortgagee Letter 2017-05.
While the Mortgagee Letter does not contain new policies specific to assignment eligibility, the stacking order of items needed for the various documentation packages has changed and that information can be found in the Mortgagee Letter. Servicers must abide by the provisions of Mortgagee Letter 2017-05 by April 18, 2017, but have the option to comply sooner.