According to FHA Info #17-40, on September 18, 2017, the Federal Housing Administration (FHA) will update its FHA systems to accommodate:
- The implementation of origination and servicing policies contained in the Home Equity Conversion Mortgage (HECM) program final rule that published on January 19, 2017;
- The servicing implementation guidance issued in Mortgagee Letter 2017-11 on August 24, 2017; and
- The changes to the HECM Mortgage Insurance Premium Rates and Principal Limit Factors announced in Mortgagee Letter 2017-12 on August 29, 2017.
Updates will be made to the following systems:
- FHA Connection (FHAC)
- Computerized Homes Underwriting Management System (CHUMS)
- FHA HECM Calculation Software
- Home Equity Reverse Mortgage Information Technology (HERMIT)
HUD states that while FHA systems updates will be visible on Monday, September 18th, the HECM final rule changes will be effective for all FHA case numbers assigned on or after September 19, 2017, and the Mortgage Insurance Premium Rates and Principal Limit Factors changes will be effective for all FHA case numbers assigned on or after October 2, 2017.
A FHAC and CHUMS Release Notes document outlining the updates to be made to FHAC and CHUMS can be viewed on the HECM for Lenders webpage on HUD.gov.
FHA also intends to implement changes to HERMIT to support the servicing policy changes included in the HECM final rule and the additional guidance announced in Mortgagee Letter 2017-11; more detail on these changes, including the Release Notes and the updated User Guide, will be available on the HERMIT System and Resources webpage on HUD.gov and the HERMIT homepage.
HECM Calculator Software
Version 2.4 of the HECM Calculation Software will include HECM final rule changes, and the Mortgage Insurance Premium and Principal Limit Factor changes that were announced in Mortgagee Letter 2017-12.
HECM Calculator Software test scenarios , including specific software updates, will be available on the HECM for Lenders webpage under “Software.”
HECM Counseling Certificates
FHA-Info #17-40 addresses changes in the HECM Counseling Certificate by clarifying that On September 18, 2017, FHA will provide mortgagees the option to view and print HECM Counseling certificates in FHA Connection (FHAC). The counseling certificate in FHAC will not be signed. While the mortgagee may still take the initial loan application, the mortgagee can only proceed to process it once the counseling is complete, as evidenced by a completed HUD 92902 (HECM Counseling Certificate) that contains the signatures of both the counselor and borrower.
Mortgagees that choose to access this enhancement will be required to:
- Establish procedures to obtain and document authorization from the HECM borrower to access the counseling certificate in FHAC;
- Certify in FHAC that borrower authorization to view the counseling certificate was obtained; and
- Follow the guidance on processing HECM loans contained in HUD Handbook 7610.1 REV 5 (Housing Counseling Program Handbook), Appendix A (HECM protocol), sections A.8 Lender Communications and A.9 Lender Activities.
To access HECM Counseling certificates, mortgagees will need the:
- Borrower name and address before the certificate link appears on the screen; and
- After the certificate link appears on the screen, mortgagees will then need to check an authorization
certification statement indicating prior approval from the HECM borrower to access the borrower certificate.
HECM Final Rule Policies Reminder
All policies contained in the HECM final rule (82 FR 7094) become effective for FHA case numbers assigned on or after September 19, 2017.
Mortgagees should prepare to implement all new and revised policy contained in HECM final rule using the final rule information published in the Federal Register on January 19, 2017. Furthermore, mortgagees must ensure all loan documents comply with the HECM final rule. FHA will issue updates to existing model loan documents at a later date.
- View HECM Final Rule: https://www.federalregister.gov/documents/2017/01/19/2017-01044/federal-housingadministration-strengthening-the-home-equity-conversion-mortgage-program
- View FHAC Homepage: https://entp.hud.gov/clas/index.cfm
- View Mortgagee Letter 2017-11, Implementation of HUD’s January 2017 Home Equity Conversion Mortgage (HECM) Final Rule: https://portal.hud.gov/hudportal/documents/huddoc?id=17-11ml.pdf
- View Mortgagee Letter 2017-12, Home Equity Conversion Mortgage (HECM) Program: Mortgage Insurance Premium Rates and Principal Limit Factors: https://portal.hud.gov/hudportal/documents/huddoc?id=17-12ml.pdf