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FHA Extends Waivers To Its HECM Loss-Mitigation Policies 

David Krechevsky
Nov 28, 2022

Extension applies to senior borrowers affected by COVID-19.

The Federal Housing Administration (FHA) said Monday it has granted two temporary partial waivers to its Home Equity Conversion Mortgage (HECM) loss-mitigation policies. 

Both waivers, the FHA said, continue the same flexibilities outlined in prior waivers dated June 16, 2022, that expire Dec. 31, 2022.

The two waiver extensions are:

  • Temporary partial waiver of Mortgagee Letter 2015-11, Loss Mitigation Guidance for Home Equity Conversion Mortgages (HECMs) in Default due to Unpaid Property Charges. This waiver allows mortgagees to offer repayment plans to HECM borrowers with unpaid property charges regardless of their total outstanding arrearage. It is effective through Dec. 31, 2023.
  • Temporary partial waiver of Mortgagee Letter 2016-07, Expanded Permissive Loss Mitigation for Home Equity Conversion Mortgages (HECMs) and Mortgagee’s Optional Extension to Submitting a Due and Payable Request. This waiver permits mortgagees to seek assignment of a HECM immediately after using their own funds to pay unpaid property taxes and insurance on or after March 1, 2020, by temporarily eliminating the three-year waiting period for such assignments. This waiver also is effective through Dec. 31, 2023.

 “The waivers provide mortgagees with continued flexibility to help senior homeowners with HECMs who still experience significant financial difficulties due to the COVID-19 pandemic,” the FHA said in a statement. “They enable mortgagees to offer relief to HECM borrowers who could not make timely property charge payments due to financial hardships resulting from the pandemic and provide mortgagees with additional flexibility when assigning loans to HUD (the U.S. Department of Housing and Urban  to HUD).”

FHA added that mortgagees are encouraged to review the waivers and policies outlined in Mortgagee Letters 2015-11 and 2016-07.

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