Reverse Mortgage Jan-Feb 2021

Reports From HUD continued from page 27 participants to have in-person contact with borrowers. The polices were designed to ensure that FHA-insured lending would continue despite requirements for social distancing and remote work. FHA also adjusted rules for allowing exterior-only and desktop-only appraisals. One emphasis was to protect elderly residents staying in their homes, officials say. “If nothing else, the coronavirus has put an exclama- tion point on the desire to keep one group in particular— that being seniors—in their homes, aging in place and, of course, staying healthy,” says HUD Deputy Secretary Brian D. Montgomery. Meanwhile, in April, FHA Catalyst—the agen- cy’s long-term technology modernization initiative— allowed for HECM electronic submission through its Case Binder Module. Gormley and Montgomery both point to how the new technology came online at just the right time. “We made significant progress in our technology goals, a generational leap ahead of our antiquated tech- nology systems,” Gormley says. “We had over 23,000 ini- tial HECM submissions, and we could not have endorsed HECM loans without Catalyst.” At the same time, he cautions that incomplete files put into the new system are subject to Notice of Return, which greatly slows down the entire process. Looking Forward In general, Gormley says, FHA will work with NRMLA and the industry to get HECM programs on a more sustainable footing. Specifically, he outlines Fiscal Year 2021 priorities as transitioning away from the LIBOR index, monitoring portfolio performance, improving sys- tem updates and completing the HECM section of the Single-Family Housing Policy Handbook. HUD now has a working group involved with LIBOR issues. That group includes NRMLA, the Consumer Financial Protection Bureau (CFPB) and the Alternative Reference Rates Committee, as well as Ginnie Mae, the Office of Housing Counseling, the Office of Risk Management and Regulatory Affairs and the Office of Policy Development and Research. (See related article on LIBOR, p. 24). On the servicing side, Kasey Watson, program director for the Servicing Branch of the National Servicing Center in Tulsa, OK, notes that Catalyst will improve operations. “We continue to work on improving FHA systems for servicing, so we can accept data in a little bit easier way for the industry,” Watson says. “It will also give FHA better access to the data we need to oversee the program.” Another servicing priority is the procurement of a servicing contrac- tor for HUD secretary-held HECMs. “This will be different than in the past, with the single secretary-held contractor for all FHA-held mort- gages,” Watson says. “The new pro- gram will only involve the servicing of HECM mortgages.” From FY 2013 to 2020, the secretary-held portfo- lio steadily grew from 18,153 to 146,682, which reflects borrowers successfully remaining in their homes. “And we expect this to grow at a quick rate for the next 18 to 24 months,” she adds. Some changes brought by COVID-19 likely will not remain after the pandemic ends, such as desktop appraisals. “From a risk-management perspective, I don’t think desktop appraisal is something we’re going to get comfort- able with,” Gormley says. “But we will revisit it as Catalyst continues and better analytics are available.” Catalyst has allowed an automated underwriting sys- tem (AUS) for forward mortgages, but Gormley would not commit to a possible timeline for it to be instituted in the reverse sector. “We should gain experience with the forwardmodule,” he says, “and then we’ll reach out to NRMLA for focus groups.” NRMLA President Steve Irwin says HUD has worked well with his group and made important adaptations during the pandemic, which was just one of several emer- gencies the government agency encountered in 2020. “We are so fortunate that we have a caring and responsible team at HUD who are continually developing and respond- ing to the crises,” Irwin says. “The response this team has had relative to the COVID pandemic and the variety of natural disasters that we’ve been experiencing around the country has just been amazing and very, very impressive.” Kasey Watson 28 REVERSE MORTGAGE / JANUARY-FEBRUARY 2021