• FHA insured 64,437 HECMs in FY2022, representing a maximum claim amount of $32.10 billion, a record high for the HECM program. • The average maximum claim amount per HECM endorsement has risen steadily since FY2013, increasing to a record $498,221 in FY2022. • The share of HECM refinances increased from 46.72 percent of endorsements in FY2021 to 48.88 percent in FY2022 as homeowners took advantage of favorable house prices to extract more equity. Download a copy of the annual report at https://bit.ly/3uZaa92. HECM Loan Limit Increases to $1,089,300 in 2023 Every October, emails start streaming in from members who want to know if I have any insights into what the new Federal Housing Administration (FHA) lending limit will be. My response to them is always the same: “We’ll know more the first week of December.” Like clockwork, FHA announced December 1 that the new maximum claim amount for HECMs in calendar year 2023 would increase from $970,800 to $1,089,300, effective for case numbers assigned on or after January 1, 2023. This new maximum claim amount is also applicable to Freddie Mac’s special exception areas: Alaska, Hawaii, Guam and the Virgin Islands. The HECM loan limit is calculated at 150 percent of the Freddie Mac national conforming limit announced by the Federal Housing Finance Agency a few weeks before. It is important to note the single national loan limit for HECM (as opposed to area-by-area limits) exists because of NRMLA’s advocacy efforts. NRMLA persuaded Congress and key U.S. Department of Housing and Urban Development officials that the area limits used for forward mortgages did not really make sense for HECMs. Area-by-area limits empower consumers to buy an equivalent home wherever they are. Such a home costs a lot less in St. Louis than in Los Angeles or Buffalo, NY, than in the New York City metro area. On the other hand, a HECM helps homeowners draw cash from their accumulated equity to age in place. The costs of aging, prescription drugs, durable medical equipment or adapting a home with stair glides do not differ regionally. NRMLA successfully argued that a homeowner with a higher-value property in an area with a low FHA loan limit should not be penalized by only being able to borrow based on the forward mortgage loan limit. NRMLA Submits Comments to HUD, CFPB One of the most effective ways NRMLA advocates for improvements to the HECM program is through comment letters we submit to the U.S. Department of Housing and Urban Development (HUD), Consumer Financial Protection Bureau (CFPB) and other regulators. The fourth quarter of 2022 was especially busy as we submitted three sets of comments. On November 18, NRMLA submitted a letter to HUD on the London Interbank Offered Rate (LIBOR) transition. The letter was written in response to a proposed rule published by HUD on October 19 regarding the replacement of LIBOR with the Secured Overnight Financing Rate as an approved index for Federal Housing Administration (FHA)-insured adjustable-rate mortgages, including HECMs. On November 28, NRMLA submitted a letter to CFPB on ways to improve loss mitigation protocols to better assist delinquent HECM borrowers. The letter was written in response to a request for public input concerning methods to reduce risks for consumers who experienced disruptions in their financial situations that could interfere with their ability to remain current on their mortgages. On October 13, the bureau’s Office of Older Americans clarified that the request for public comment included loss mitigation options for reverse mortgages. A copy of the letter was also provided to FHA Commissioner Julia Gordon. The final letter, submitted to HUD on December 5, included proposals to make the HECM program more accessible and attractive to homeowners living in underserved communities and lower-value homes. The comments were submitted in response to a request for information issued by FHA on October 4 seeking public input regarding barriers to the origination of small Hey, Members Hey, Members continued on page 10 REVERSE MORTGAGE / MARCH–APRIL 2023 9
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