FHA issued Mortgagee Letter 2023-23 announcing updated servicing requirements for the Home Equity Conversion Mortgage Program (HECM). Key updates include:
- Permitted borrower contact by phone to verify occupancy for the program’s required annual occupancy certification;
- The allowance of outstanding homeowner’s association dues to be included in the calculation of a repayment plan for borrowers who are behind on the borrower’s HECM financial obligations;
- Expanded ability to work with borrowers who are behind on property taxes or hazard insurance by an amount up to $5,000 without calling the mortgage due and payable;
- The addition of the ability to assign a HECM to HUD after the servicer has funded a cure for a borrower’s delinquent financial obligations, so long as the borrower has made all property charge payments for 1 year and all other assignment eligibility criteria are met;
- Aligned post-due and payable appraisal requirements for all HECMs;
- Modified maximum arrearage amount for mortgagees when electing to delay requesting approval to call a HECM due and payable;
- Expanded and updated criteria for payment of Cash for Keys;
- Streamlined requirements for executing alternatives to foreclosure and updated incentive payments for successful completion of loss mitigation options; and
- The addition of a new incentive payment for completing alternatives to foreclosure.
Revisions related to aligning post-due and payable appraisal requirements, Cash for Keys, and incentive payments are effective March 25, 2024. All other updates went into effect November 30, 2023.
Click to view the FHA Mortgagee Letter 2023-23: https://www.tenaco.com/wp-content/uploads/2023/12/FHA-Mortgagee-Letter-2023-23-11-30-23.pdf
Click to view the FHA Info #2023-99: https://www.tenaco.com/wp-content/uploads/2023/12/FHA-Info-2023-99-11-30-23.pdf
