Following an announcement that the U.S. Department of Housing and Urban Development (HUD)’s Office of Policy Development and Research is seeking public comment related to application and origination documents for the Federal Housing Administration (FHA)-backed Home Equity Conversion Mortgage (HECM) program, the National Reverse Mortgage Lenders Association (NRMLA) and the Mortgage Bankers Association (MBA) have submitted a joint letter with their feedback.
MBA and NRMLA each state that they are generally supportive of the proposed changes, which include wholesale revisions to the lender table for the best estimate of the total cost of a refinancing to the borrower, as well as increases to the borrower’s principal limit.
HUD also seeks to transition away from the discontinued Fannie Mae Form 1009, the residential loan application for reverse mortgages, to Form 1003, the Uniform Residential Loan Application (URLA).
HUD also plans to replace its use of some internal forms, including one used in conjunction with U.S. Department of Veterans Affairs (VA) loans. In particular, HUD Form 92900–C is designed to “collect loan-level data that is needed for insuring purposes and not found on Fannie Mae form 1003,” according to the original announcement.
The standard loan application to originate a HECM currently includes Fannie Mae Form 1003, HUD Form 92900-C and Fannie Mae Form 1103, the latter of which is a supplemental consumer information form that has been adopted by the mortgage industry.
“The Associations support HUD’s plans to transition from using the FNMA-1009 and HUD 92900–A to the FNMA-1003 and new HUD 92900-C,” the letter stated. “We applaud HUD’s efforts in trying to change the requirements for HECMs to be more in line with the requirements of the forward mortgage industry.
”However, since the reverse mortgage industry has been using the FNMA1009/HUD 92900–A for a long time, before making the switch to the FNMA-1003/HUD 92900-C we would like the opportunity to comment on the new HUD 92900-C when that form is made available to the public.”
The associations also request that HUD give HECM lenders at least 120 days before implementing the new forms, the letter said.
NRMLA and MBA also request changes to language in certain forms, including in the Compliance Inspection Report, so that the report can “utilize the documentation from a licensed and bonded person as required by the state to certify without additional costs to the borrower or mortgagee.”
The associations also propose some language changes to the New Construction Subterranean Termite Service Record; the Builder’s Certification of Plans, Specifications, & Site; the HECM Anti-Churning Disclosure; and the condominium single-unit approval questionnaire to answer specific approval and detail issues that have been identified.
