[Updated] HUD awards Celink with reverse mortgage servicing contract

Industry trade association relates optimism about the change

Lansing, Mich.-based Celink has been awarded the Federal Housing Administration (FHA) Single Family Secretary-Held Home Equity Conversion Mortgage (HECM) Assets contract and will provide loan servicing for HECM reverse mortgage loans sponsored by FHA, RMD has learned.

According to the contract’s entry on a website administrated by the U.S. Government’s General Services Administration (GSA), the total contract value is just over $169 million and the “period of performance” will be for a one-year base period and four additional 12-month option years.

While Celink and the government have specified that the contract has been awarded, people familiar with the matter have relayed the possibility that other potential bidders for the contract could offer a challenge to this award.

When reached, a representative of prior servicing contract holder Novad Management Consulting declined to comment.

“As posted to today, a contract has been awarded for Home Equity Conversion Mortgage (HECM) loan servicing,” a HUD spokesperson told RMD. “We have no further details to provide at this time.”

For Celink’s part, the company is pleased to be partnering with HUD and looks forward to putting recent investments into practice, according to a statement from Celink CEO Marion McDougall.

“We are delighted to be partnering with HUD on this important assignment and believe the significant investments made over the past five years in Celink’s management capabilities and technology platform have positioned the company to continue its leadership position in the increasingly important reverse mortgage marketplace,” said McDougall. “We look forward to partnering with the HUD team and offering exceptional customer service, and operational effectiveness to HUD and all the HECM borrowers.”

When asked for additional comment, a representative of Celink declined to provide it.

When reached, National Reverse Mortgage Lenders Association (NRMLA) President Steve Irwin relayed optimism at the news.

“I am delighted to hear the news that Celink has been awarded the FHA Single Family Secretary-Held HECM Assets contract and will provide loan servicing for HECMs,” Irwin told RMD. “There have been many service-level challenges with the various HECM contract sub-servicers. To now have a robust team with the subject matter expertise and state-of-the-art systems in place to handle the administration of the assigned HECMs, we should expect to see increased satisfaction among HECM borrowers as well as greater efficiencies in the servicing of the secretary-held HECM portfolio.”

Recent history

Novad Management Consulting has been FHA’s reverse mortgage servicing contractor since 2014. FHA had been aiming to find a new servicing contractor to help fix remaining back-end loan issues at the end of the Trump administration, according to 2020 comments from U.S. Department of Housing and Urban Development (HUD) and FHA personnel.

“The current procurement that is out and [which] we are currently working through will only involve servicing of HECM mortgages,” said Kasey Watson, program director of HECM servicing at HUD’s National Servicing Center in November, 2020. “So, we’re excited for that change, and excited that that procurement is in-process. Of course, as that works through this entire process, I can’t give you any kind of update as far as when we think that will be completed. But it is in-progress, and we’re excited to be moving forward down this new path.”

After the transition to the Biden administration, indications from the agency pointed to no major change taking place regarding the HECM servicing contract by late 2021. That October, HUD announced that it had awarded a new Single Family Secretary-Held Loan Servicing contract to Information Systems & Networks Corporation (ISN) on a host of single-family forward mortgage programs.

However, the Secretary-Held HECM loans and HECM subordinate mortgages at that point remained unchanged with Novad Management Consulting, according to an FHA informational notice.

In February, it was announced that Fairway Independent Mortgage Corporation had selected Celink to serve as its own reverse mortgage subservicer. In April 2021, Celink announced the launch of its online reverse mortgage servicing portfolio for borrowers, and applauded the U.S. Department of Housing and Urban Development (HUD) for introducing new protections for non-borrowing spouses (NBS) the following month.

Editor’s note: This story has been updated with additional contract details derived from online GSA records.

Leave a Reply

Your email address will not be published. Required fields are marked *

Most Popular Articles

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please