July/August 2022 Reverse Mortgage Magazine

In Washington, they’re talking about ... LIBOR Transition Guidelines Added to Federal Spending Package The Consolidated Appropriations Act signed into law by President Joe Biden on March 15 not only funds the federal government through September 30, but also includes a separate bill related to the ongoing transition away from the London Interbank Offered Rate (LIBOR). The Adjustable Interest Rate Act authorizes the Federal Reserve Board (FRB) to come up with a replacement index based on the Secured Overnight Financing Rate (SOFR) that will be used beginning on the first London banking day after June 30, 2023, unless the FRB determines that any LIBOR tenor will cease to be published or be representative on a different date. Although the law is not fully clear, NRMLA’s outside counsel, Weiner Brodsky Kider, believes that the law arguably should not impact HECMs, because the adjustable rate HECM loan documents have a fallback provision and the loan documents, along with the federal law governing such documents, gives HUD the authority to come up with a replacement index for adjustable-rate HECMs. Counsel’s analysis of the law noted that there may be issues for LIBOR-based, adjustable-rate proprietary reverse mortgages if the loan documents do not contain a fallback provision that meets the requirements under the Act. As such, counsel recommends that individual lenders check the loan documents to see if LIBOR is the index for those loans and whether the documents contain a fallback provision that either specifies a “benchmark replacement” or a “determining person,” as those terms are defined under the Act. FHA Connection Enhanced for Electronic Submission of Flood Insurance Data Upgrades have been made to the Federal Housing Administration (FHA) Connection that require mortgagees to indicate if property improvements are in a Special Flood Hazard Area (SFHA) and, if so, provide the applicable flood insurance data electronically. The enhancements, announced in FHA Info 202225 on March 9, implement new fields for the electronic submission of flood-related data currently contained in FHA case binders. This electronic data collection will enable FHA to perform more data analytics on FHAinsured properties in flood zones. HUD Replaces FIT and Benefits Check Up The Financial Interview Tool (FIT) used by HECM counselors to create a budget and the Benefits Check Up tool to identify local resources for reverse mortgage borrowers have been replaced by the Client Budget and Resource Identity Tool (CBRIT), the U.S. Department of Housing and Urban Development (HUD) announced. The “Resource Identity” portion of the CBRIT will help counselors direct HECM clients to various non-HECM resources for which they may be eligible and provides instructions on accessing those resources. This feature replaces the National Council on Aging Benefits Check-Up, and its use should be reflected in HECM client files, said HUD. For any questions, contact your agency’s HUD point of contact or email housing.counseling@hud.gov. And now you’re up to date. What’s News continued from page 9 LET US KNOW WHAT YOU’RE TALKING ABOUT. This forum is the place for readers to share their opinions with fellow colleagues about the direction of the reverse mortgage business and other retirement trends. Submissions should be limited to 100 words or less and submitted to Associate Editor Darryl Hicks at dhicks@dworbell.com. 10 REVERSE MORTGAGE / JULY-AUGUST 2022

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