With interest rates at near record lows, NRMLA felt it was important to highlight refinance guidance from Mortgagee Letter 2009-21, which addresses anti-churning disclosures and counseling requirements.
- ML 2009-12 updated the HECM Anti-Churning Disclosure (HUD-92901) to alleviate confusion around the costs of refinancing. This form must be signed by the borrower and ensures that he or she is not being induced to refinance without receiving any benefit; and
- Borrowers can waive and opt out of the HECM counseling requirement only if all three of the following conditions are met:
- The mortgagor has received the required HECM Anti-Churning Disclosure form;
- The increase in the mortgagor’s principal limit exceeds the total cost of the HECM refinance by an amount equal to five (5) times the cost of the transaction (Block #1 on Anti-Churning Disclosure Form); and
- The time between the closing on the existing HECM and the application for refinancing does not exceed five years.
If you have any questions about these requirements, please email firstname.lastname@example.org.