The Department of Housing and Urban Development (HUD) has released a new mortgagee letter offering new guidance regarding the administration of HECM counseling.
Mortgagee Letter 2011-31 presents five separate updates or guidance to HECM counselors and lenders as it relates to the HECM counseling protocol and certificate:
- Revisions to the Certificate of Counseling (HUD form 92902) – adds a specific data field for the attorney-in-fact holding a Power or Attorney name and signature, add the HECM Saver as an option to be presented by counselors, replaces the Agency Tax Identification Number with the Agency Housing Counseling System Identification number, and includes a HECM for Purchase certification by homebuyer
- Changes to the documentation of the power of attorney – the AIF's name must be entered at the top of the certificate along with the name of the homeowner. The AIF must sign where indicated on the revised form.
- Signatures on Certificate – all owners shown on the property deed and non-borrowing spouses must receiving counseling and must sign the counseling certificate
- Dates on Certificate – counselors are to complete both the date counseling completed and the date of expiration of the certificate
- Revisions to Certificate – revisions are only allowed up until the time of endorsement
- Change Lenders & New Case Numbers – clarifies that a HECM certificate can be associated with a new case number and case numbers can be transferred to other lenders regardless of certificate expiration date
The new guidance in the mortgagee letter amounts more of a clarification of existing standard practices, rather than implementing of new rules. Previously, in Mortgagee Letter 2006-25, FHA has strongly recommended that non-borrowing spouses receive HECM counseling, and many lenders followed suit by requiring it. This ML makes this an official FHA requirement.
The mortgagee letter is effective 30 days from the date of the letter, August 26, 2011.