The Federal Housing Administration published Mortgagee Letter 2023-10 to allow for faster payment of funds to mortgagees when they assign a Home Equity Conversion Mortgage to HUD.
Effective immediately, ML 2023-10:
- lowers the minimum loan balance required to submit an assignment claim for review from 97.5 percent of the Maximum Claim Amount (MCA) to 97 percent;
- allows for mortgagees to submit original Notes and Mortgages no later than 90 days after the assignment claim payment date;
- extends the timeframe for delivery of assignments of the Mortgage to the Secretary from 6 months to 12 months for HECMs with FHA case numbers assigned before September 19, 2017; and
- modifies the supporting documentation that mortgagees must submit to be eligible for Preliminary Title Approval (PTA).
“This is significant news,” said NRMLA President Steve Irvin. “We greatly appreciate the steps taken by FHA to make the assignment process for HECM reverse mortgages more efficient and to further reduce liquidity risk to issuers.”
In a separate press statement issued in conjunction with the mortgagee letter, Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon stated: “The Home Equity Conversion Mortgage program is an important resource for the nation’s senior homeowners who wish to age in place. Today’s changes simplify processes and pay mortgagee claims more quickly, providing meaningful relief to program participants as they navigate the unique challenges of today’s economic environment.”