Reverse mortgage lenders should review their pending case cancellation report to identify loans that are marked for automatic cancellation, the Federal Housing Administration (FHA) is advising mortgagees.
The home equity conversion mortgage (HECM) financial assessment and property charge policies become effective for case numbers assigned on or after April 27, 2015.
If there has been no last action for six months on uninsured HECM case numbers, the case number will automatically be cancelled in FHA Connection (FHAC), notes the FHA. Mortgagee Letter 2011-10 defines last action and exceptions.
If a borrower is still interested in pursuing a HECM, lenders must obtain a new case number and will be required to comply with the new HECM financial assessment and property charge policies.
Written by Cassandra Dowell
