HUD Publishes Updates to HECM Handbook

HUD Publishes Updates to HECM Handbook

The Department of Housing and Urban Development published a revised copy of the Single-Family Handbook 4000.1, which includes changes to the HECM section.

Here is a link to the revised 4000.1.  Updates are highlighted in yellow.

Go deeper:

  • Among the changes discussed in the HECM Handbook was the rounding of interest rates. HUD indicated that a “Mortgagee may round the Expected Rate, or the initial Adjustable-Rate Mortgage (ARM) Note rate, to the nearest one-eighth of one percentage point.”
  • The Handbook adds, “The Mortgagee may round both rates, only one rate, or none of the rates, but it must maintain the same rounding throughout the life of the HECM.”
  • Ginnie Mae is equally explicit in its issuer guidance that rounding must be done for loans that are pooled into its securities.
  • Members are encouraged to consult with their legal/compliance staff in this area, or wholesale investor(s) to determine if the latter has any additional overlays.

The bottom line: NRMLA’s committees will be reviewing the Handbook and reporting to the membership on any noteworthy changes. We’ll also be discussing them at next week’s Eastern Regional Meeting in Washington, DC, on May 29.

Published by

Darryl Hicks

Darryl Hicks is Vice President of Communications for the National Reverse Mortgage Lenders Association. In this capacity, Hicks writes for NRMLA's publications, manages the association's web sites and social media accounts, assists committees and the Board of Directors, and manages the Certified Reverse Mortgage Professional designation. Prior to joining NRMLA in 1999, Hicks spent three years in the Washington, D.C. bureau for National Mortgage News.