HUD issued their announcement in regards to when the Financial Assessments for Reverse loan applicants will go into effect. We have been waiting throughout the year for the commencement date and anticipating this next level of protection for the borrowers who are applying for a Reverse mortgage.
Here is a copy of an article that discusses the announcement and what we in the Reverse loan industry can expect and what type of documentation the potential borrower will be tasked to provide as part of the loan application.
HUD Releases Reverse Mortgage Financial Assessment to Take Effect March 2015
Posted By Elizabeth Ecker On November 10, 2014 @ 1:39 pm In News,Reverse Mortgage | No Comments
The Department of Housing and Urban Development has issued a financial assessment for reverse mortgage borrowers that will take effect for all case numbers issued on or after March 2, 2015.
The financial assessment  is detailed by HUD through Mortgagee Letter 2014-22  published Monday. For borrowers who do not demonstrate their willingness to meet their loan obligations, a fully-funded life expectancy set-aside will be required.
“The mortgagee must evaluate the mortgagor’s willingness and capacity to timely meet his or her financial obligations and to comply with the mortgage requirements,” HUD writes in defining the purpose of the financial assessment. “In conducting this financial assessment, mortgagees must take into consideration that some mortgagors seek a HECM due to financial difficulties, which may be reflected in the mortgagor’s credit report and/or property charge payment history. The mortgagee must also consider to what extent the proceeds of the HECM could provide a solution to any such financial difficulties.”
I will share the remainder of this article in a following post.