HECM Change Deadline Nears

On Sept. 3, 2013, the Federal Housing Administration (FHA) published Mortgagee Letters (ML) 2013-27 and 2013-28, Changes to the HECM Program Requirements and HECM Financial Assessment and Property Charge Guide respectively, which provides HECM policy guidance on new initiatives that will strengthen the Mutual Mortgage Insurance Fund and preserve the financial soundness of the HECM program. The Sept. 30, 2013 effective date for certain changes announced in ML 2013-27 that are effective for case numbers assigned on or after Sept. 30, 2013. The Origination Case Processing application in FHA Connection will shut down two hours earlier than usual on Saturday, Sept. 28, 2013. The application will shut down at 6:00 p.m. EST to allow changes relative to the policies noted above to be deployed into the production environment. You will not be able to request new case number assignments until the application is back online Monday, Sept. 30, 2013 at 8:00 a.m. EST. When the system comes back online, users will notice updates to the Case Number Assignment screen selections and new data fields on the Appraisal Logging, HECM Insurance Application, and Case Query screens. Mortgagee Letter 2013-27 implements several changes which will affect the following requirements: ►Initial disbursement limits; ►New Single Disbursement Lump Sum payment option; ►Initial mortgage insurance premiums; ►Initial mortgage insurance premium calculation for refinance transactions; ►New Principal Limit factors; ►Financial assessment requirements; and ►Funding requirements for the payment of property charges based on the financial assessment. Mortgagees are reminded that FHA reserves the right to review case number assignments and revoke any case number assigned that violates FHA regulations and guidance. FHA also noted that Version 2.0 of the HECM Calculator Software is in the process of being updated to accommodate the new Principal Limit Factors (PLF) table and will be released on or before Sept. 28, 2013.