FHA adds loan document submission option for HECM mortgagees

Mortgagees can now send original hard copies of a loan agreement directly to Celink

The Federal Housing Administration (FHA) issued a partial temporary waiver on Wednesday that permits Home Equity Conversion Mortgage (HECM) mortgagees to send original hard copies of a loan agreement directly to Compu-Link Corporation (Celink), the FHA’s HECM servicing contractor.

This allows additional flexibility for mortgagees, who were previously required to send the materials directly to the regional FHA Homeownership Center (HOC).

“This change is designed to eliminate unnecessary costs and transfers of the original Loan Agreement,” the FHA said. “With this waiver, mortgagees have the option to submit the original loan agreement and related exhibits (schedule of closing costs and liens, payment plan, and repair rider, if applicable) directly to [Celink].”

Mortgagees who send the original loan agreement and associated exhibits to Celink must include two PDF copies of the loan agreement and the exhibits in the FHA endorsement case binder submitted to the HOC for an insuring decision, the announcement said.

“If the mortgagee chooses not to send these documents directly to [Celink], they not only are required to send hard copies of the original loan agreement and related exhibits, but they must also send two additional hard copies of the loan agreement and related exhibits to the HOC,” FHA said.

This requirement was put in place by Mortgagee Letter (ML) 2014-22, which established the current case binder stacking order.

“The HOC will then submit these hard copy documents to [Celink] on their behalf,” FHA said.

The FHA said the waiver is designed to reduce burdens associated with mailing documents to multiple locations.

“Currently, Mortgagees are sending the original Loan Agreement and related Exhibits to the HOCs, who in turn, will forward those documents to the HECM Loan Servicer Compu-Link Corporation,” the FHA said in its justification.

“[The U.S. Department of Housing and Urban Development (HUD)] recognizes the burdens and costs associated with the current process that requires mailing original documents to two different locations. This partial waiver provides an option to remove that burden and remove an unnecessary custody exchange.”

The waiver was signed by Elissa Saunders, director of single-family program development.

At the onset of the COVID-19 pandemic, FHA personnel reported seeing loan documents and case binders piled up in HOC offices. Hard copies were no longer submitted to the HOCs once federal employees began working remotely, with FHA’s Catalyst software adding online submission functionality of case binders during the pandemic period.

Now that the presidentially-declared emergency stemming from COVID-19 has ended, mortgagees can now submit hard copies once again and this change is designed to ease that process.

Celink was awarded the HECM servicing contract by HUD in March 2022 and assumed the responsibilities in December.

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