FHA to Revamp Reverse Mortgage Program
President Obama signed the Reverse Mortgage Stabilization Act of 2013 Aug. 9, which gives the U.S. Department of Housing and Urban Development the green light to revamp the Federal Housing Administration’s Home Equity Conversion Mortgage Program, National Mortgage News reported.
The new legislation, sponsored by Reps. Denny Heck, D-Wash., and Michael Fitzpatrick, R-Pa., gives the FHA new regulatory powers over HECM, including the ability to conduct financial assessments of HECM applicants and to set limits on the first draw that seniors can take while also requiring escrow accounts to set money aside for property taxes and insurance.
HUD wants to implement changes by Oct. 1, which is the start of the government’s new fiscal year. By that time the agency will have to update language in its model documents for lenders, update counseling protocol and retrain counselors, National Mortgage News reported.
Read more about the Reverse Mortgage Stabilization Act of 2013.