FHA Delays Reverse Mortgage Financial Assessment Date

The Federal Housing Administration (FHA) just announced that they will delay implementing the reverse mortgage financial assessment guideline that was set to become effective in less than three weeks.  FHA is citing technical difficulties as the reason and expects the new effective date to be within 30 to 60 days of the previous March 2nd target date.  FHA announced on Feb. 12th that they will be publishing a new Mortgagee Letter that will outline the new date at which point the financial assessment will turn mandatory.  Stay tuned and visit www.reversemortgagebenefit.com for more information.

Breaking News: Reverse Mortgage Financial Assessment to Take Effect March 2015

HUD issued Mortgagee Letter 2014-22 on November 10, 2014, signaling the confirmation of the long anticipated Home Equity Conversion Mortgage (HECM) Financial Assessment and Property Charge Requirements.  The financial assessment requirements will be effective for all case numbers issued on or after March 2, 2015.  The purpose of the new requirements is to evaluate the mortgagor's (borrower) willingness and capacity to timely meet his or her financial obligations and to comply with the mortgage requirements.  The mortgagee (lender) must also consider to what extent the proceeds of the HECM could provide a solution to any financial difficulties the borrower may be currently having.  The borrower's income and credit history will be reviewed with the possibility of establishing an escrow account from the reverse mortgage proceeds to pay for future property tax and homeowner's insurance premiums.  Stay tuned for additional information as it becomes available.