In comments submitted to the Department of Housing and Urban Development this week, NRMLA offered recommendations to make the assignment process for HECM reverse mortgages more efficient and to further reduce liquidity risk to Mortgagees.
FHA published a draft mortgagee letter on April 4 that proposed changes to the HECM Assignment Claim Type 22 submission criteria and requested feedback by April 11, 2023.
NRMLA convened servicers and HMBS issuers to coordinate a response with outside counsel.
Among its recommendations, NRMLA proposes that in lieu of requiring Mortgagees to provide a current hazard and, if applicable, flood insurance declaration page in the Compliance Package, FHA permit Mortgagees to provide electronic evidence that such insurance is in force and effect, as well as coverage amounts.
“Permitting such information to be shared electronically would eliminate the need for Mortgagees to contact insurance brokers to make written and follow-up verbal requests for copies of the policy declarations page, a process that is both cumbersome and necessarily burdened with unreasonable third-party delay,” says NRMLA.