HUD has released its final rule – scheduled to take effect later this year – on changes to its HECM program
The Department of Housing and Urban Development has issued its final rule on changes to its Home Equity Conversion Mortgage program.
The rule will take effect Sept. 19, according to a report by Reverse Mortgage Daily.
Under the rule, mortgage originators will be required to inform prospective HECM borrowers of all HECM products, features and options insured by the FHA, “irrespective of the particular HECM products offered by the mortgagee,” the role states.
While the FHA does not intend to change the current disbursement limits of 60% and 10% on disbursements during the first 12 months at this time, the new rule gives the agency flexibility to change in the future in response to market conditions, according to Reverse Mortgage Daily.
“Specifically, this rule revises the regulations such that the 60% cap will never be modified to be less than 50%, and the additional percentage will never be modified to be less than 10% absent future rulemaking,” the rule states.
View the full final rule here.
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The rule will take effect Sept. 19, according to a report by Reverse Mortgage Daily.
Under the rule, mortgage originators will be required to inform prospective HECM borrowers of all HECM products, features and options insured by the FHA, “irrespective of the particular HECM products offered by the mortgagee,” the role states.
While the FHA does not intend to change the current disbursement limits of 60% and 10% on disbursements during the first 12 months at this time, the new rule gives the agency flexibility to change in the future in response to market conditions, according to Reverse Mortgage Daily.
“Specifically, this rule revises the regulations such that the 60% cap will never be modified to be less than 50%, and the additional percentage will never be modified to be less than 10% absent future rulemaking,” the rule states.
View the full final rule here.
Related stories:
NY attorney general launches investigation of reverse mortgage practices – report
Reverse mortgage still a hassle for partners of deceased borrowers
