Spot Approvals Included in Proposed Condo Guidelines New condominium approval guidelines proposed by FHA could make it easier for older condo owners to obtain a reverse mortgage. The proposed rule, Project Approval for Single-Family Condominiums, implements changes to condominium project approvals that FHA believes will be more flexible, less prescriptive and more reflective of the current market.
FHA proposes to reinstate “spot condo” approvals whereby individual units are approved by FHA rather than the entire condo project. The spot approvals would require property recertification every three years rather than the current two-year requirement and provide process efficiencies for mortgagees submitting project re-certifications.
Public comments are due November 28, 2016. While the public comment period is open for 60 days, FHA encourages all interested parties to fully review the proposed rule and submit comments as soon as feasible. Get more details on the proposed rule at nrmlaonline.org.
New CRMP Exam Goes Live
A new exam form went live in early September to test the knowledge of applicants pursuing the Certified Reverse Mortgage Professional (CRMP) designation. A team of subject matter experts convened over the summer to review the exam and make appropriate changes that reflect the current regulatory environment. A new cut score, or passing grade, was also established. Anyone who has questions about the exam, or the CRMP designation, can contact Darryl Hicks at [email protected]
Senior Home Equity Increases by $135.2 Billion in Second Quarter Housing wealth continues to grow for U.S. homeowners age 62 and older, providing seniors with added financial security in their retirement years. The aggregate value of senior home equity reached $5.9 trillion in the second quarter of 2016, a gain that propelled the NRMLA/RiskSpan Reverse Mortgage Market Index to a new peak of 212.45 from 207.60 in Q1 and an 8.7 percent year-over-year increase.
First published in Q1 2000, when senior home equity totaled $2.38 trillion, the RMMI was benchmarked at 85.47. The index initially peaked at 182.26 in Q1 2006 before declining through Q1 2009, when senior home equity dropped to a trough of $3.48 trillion and the index fell to 125.08.
Since that time, the housing recovery and growing population of senior homeowners have contributed to an upward trajectory for the RMMI. In Q2 2016, senior home values reached $7.4 trillion while senior-held mortgage debt increased by $10.75 billion to $1.48 trillion.
Government Funding Extended; No Break in FHA Insuring Authority On September 29, President Barack Obama signed into law a Continuing Resolution (HR 5325) that keeps the federal government running through December 9, when lawmakers are expected to be in Washington for a lame-duck session after the election.
The Continuing Resolution funds federal agencies including HUD and gives the FHA the authority to continue insuring HECMs.
The CR was cleared by a 342-85 vote in the House of Representatives and was passed by the Senate, 72-26.
NRMLA Opposes Mandatory Assignments NRMLA submitted comments to HUD opposing any policy change that would require mandatory assignment of every HECM once the loan balance reaches 98 percent of the maximum claim amount. Such a fundamental policy change “could have unintended and far-reaching consequences, some of which potentially could be cataclysmic to industry participants, and thus the industry overall,” NRMLA wrote in its comments.
HUD proposed this supplemental rule to address a suggestion made during the public comment period for its May 19, 2016, proposals to strengthen the HECM program. The suggestion came from an organization asserting that mortgagees are holding high-value loans for their own benefit to the detriment of the MMI fund, and that HUD must act to require mandatory assignments at 98 percent.
Mortgagees currently have the option to assign loans at 98 percent of MCA, at which time HUD assumes responsibility for servicing them until a maturity event occurs. Most mortgagees choose assignment, because as HMBS issuers they must buy out HECM loans (and related participations) from Ginnie Mae pools once they reach 98 percent. Thus, when such HECM loans are repurchased, servicers look to assign them to HUD as soon as possible, and not wait. Read the comment letter at nrmlaonline.org.
CRMP Sees Significant Growth in 2016
Interest in the CRMP designation has reached an all-time high, with application submissions doubling from last year. Thirty-eight people have already earned the designation in 2016, compared with 22 for all of last year. Another five people are preparing to take the exam. This brings the total number of CRMPs to 146. CRMPs are geographically distributed throughout the United States, with representation in 37 states. California has the most CRMPs (39), followed by Florida (17) and New York (12). The types of individuals pursuing the designation have also evolved over time. While the CRMP was designed for loan originators, current designees include wholesale account representatives, trainers, underwriters, processors and title insurers. Liquidity Challenges Focus of GNMA Summit Nearly 900 mortgage originators, housing finance experts and government officials joined Ginnie Mae this week to explore the most critical challenges facing the housing finance industry. The two-day Summit in Washington, D.C., focused on the shift to independent mortgage bankers, new business models for managing mortgage servicing rights, and the uncertain regulatory environment.
“Independent mortgage bankers now comprise approximately 80 percent of Ginnie Mae’s monthly issuance volume,” said Ginnie Mae President Ted Tozer. “They are an important piece of the continued success of the housing finance industry. However, if we want borrowers to continue to have access to credit, we need to take a serious look at the liquidity challenges these institutions are facing.”
In August, Ginnie Mae saw its highest monthly issuance guarantees in history with $48.4 billion. Most of this increase is the result of independent mortgage bankers entering the Ginnie Mae program, helping to account for $3.1 trillion in issuance since 2009. Congratulations New CRMPs NRMLA congratulates the following individuals for achieving the status of CRMP.
- Jeff Cota, Pure Mortgage, San Diego, California
- Rex Duffin, Sum American Mortgage Company, Mesa, Arizona
- Loren James Riddick, Peoples Home Equity, Inc., Alcoa, Tennessee
Thank You for Joining NRMLA welcomes our newest members
- Fidelity Bank, West Des Moines, Iowa (Lender)
- Navicore Solutions, San Diego, California (HECM counselor)