New HERMIT Reverse Mortgage Technology Still Not Ready, HUD Says

The Department of Housing and Urban Development sent an email to its HECM business partners this week informing them that servicer training for its Home Equity Reverse Mortgage Information Technology (HERMIT) system is still pending.

While HUD said it does not have any new HERMIT materials for distribution, it noted progress points in the development of the technology.

“We are assessing results from our recent User Acceptance Testing (UAT) and identifying required changes,” the email said. “We believe this must occur before we can conduct training and subsequently roll out HERMIT.”

Additionally, HUD noted that it is establishing new baselines for HERMIT’s implementation and is working on a plan to include more servicers in its development discussions and parallel testing. It is also revising the HERMIT training plan and is updating the HERMIT user guide, and expects to have new dates and a training curriculum

The system has experienced numerous delays through its development, most recently having notified the industry in June that it would be postponed again after its initially planned November launch.

HERMIT technology is being developed as a second generation to the outdated Insurance Accounting Collection Systems, which was developed in 1989 and has been used by servicers ever since.

The development of the system falls under a $32 million contract which was awarded by HUD in 2009. The project came under leadership of a new project manager in January, and the date of completion remains unknown.

Written by Elizabeth Ecker

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