FHA rolls out new training modules after long-awaited HECM Handbook publication

FHA announced new reverse mortgage-specific training modules, including information from the recent sweeping update to the HECM sections of the Single Family 4000.1 Handbook

The Federal Housing Administration (FHA) this week announced the availability of new Home Equity Conversion Mortgage (HECM) program-specific training modules, designed to incorporate the sweeping changes and additions to the HECM section of its Single Family Housing 4000.1 Handbook.

“The second self-paced training module — the Home Equity Conversion Mortgages (HECM) Origination and Servicing Overview — focuses solely on the newest and final Handbook 4000.1 section that was released on October 31, 2023,” FHA said in an informational notice.

“It begins with a review of the new HECM section’s style and structure — which is consistent with the rest of Handbook 4000.1 — for HECM originators, servicers, and other interested parties,” FHA continued. “Additionally, it provides viewers with an overview of some of the more recent HECM policy updates that have been incorporated into this new Handbook section, making it easier for HECM originators and servicers to locate the information needed to do with business with FHA in one place.”

Interested stakeholders are directed to a link where they provide their registration information, which allows them to watch the full 27-minute recording. In the recording, Acting Director of FHA’s Office of Single Family Program Development Mary Jo Sullivan explained that the first version of the 4000.1 Handbook was published on Sept. 30, 2014.

A long time coming

“On Oct. 31 2023 — nine years, one month and one day later — we published the content for the last section of the handbook,” Sullivan said. “The Home Equity Conversion Mortgage origination through servicing section […] consolidates existing program guidance previously found in over 100 Mortgagee Letters, various handbooks, the HECM Financial Assessment and Property Charge Guide and various other policy materials.”

The new sections also contain revisions to policy for “clarity, consistency, and to conform to the published Handbook 4000.1 organizational structure,” she added.

The reverse mortgage industry had waited a long time for the incorporation of the new HECM section into the Handbook. The effort was the product of years’ worth of work by both industry participants and FHA staff.

“With the incorporation of the HECM section, [the Handbook] reached [the Office of Single Family]’s original goal of developing a single policy document that includes comprehensive and authoritative guidance for all its policies and programs,” Sullivan explained. “This effort took a lot of hard work from a lot of FHA staff, both past and present.”

Sustained work and leadership focus

In an interview with RMD published the day the new HECM section went live, FHA Office of Single Family Asset Management Director Lisa Saunders said that industry collaboration was critical in reaching the goals of the document.

“The industry partnership has been fantastic and is a big part of the final product that we’ve released today,” Saunders said in October. “We’ve had solid engagement throughout the process. When we posted the draft version of the Handbook on our drafting table, we received fantastic and very helpful feedback from the industry. I’ve had the opportunity to talk and dig deeper on the topic since then.”

Deputy Assistant Secretary for the Office of Single Family Housing Sarah Edelman added that despite other priorities emerging throughout the work on this section, the HECM program’s importance to the Biden administration helped get it over the finish line.

“[This has] been in the works for a very long time,” Edelman said. “It has spanned years. It has often gotten waylaid as other priorities have taken first position. But HECM is so important to this administration, so this has been prioritized.”

At the National Reverse Mortgage Lenders Association (NRMLA) Annual Meeting and Expo in Nashville, the Biden administration’s housing leaders showed up in force: attendees included FHA Commissioner Julia Gordon, Ginnie Mae President Alanna McCargo and Office of Housing Counseling head David Berenbaum. Industry participants were encouraged by their presence at the event based on conversations with RMD.

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