Reverse Mortgage Regulations

On February 15, FHA lenders and brokers will be playing by a new set of rules when ordering appraisals.

On Wednesday, December 30, NRMLA submitted comments to HUD in response to the Proposed Rule eliminating FHA approval of correspondents, increasing net worth requirements for lenders and shifting responsibility for overseeing brokers to lenders.

Below is a summary prepared by NRMLA's legal counsel James Milano of Weiner, Brodsky, Sidman, Kider, P.C., detailing several important legal changes that will become effective either on January 1, 2010 or early in 2010.

This morning, the U.S. Department of Housing and Urban Development published Mortgagee Letter 2009-47, which implements a final rule published in September that established the HECM Counselor Roster and testing standards that will be used to qualify new HECM counselors.

On October 22, 2009, HUD issued more FAQs for the Real Estate Settlement and Procedures Act (RESPA). These FAQs address what NRMLA’s RESPA Committee determined were four main issues with regard to RESPA’s effect on reverse mortgage transactions.

NRMLA submitted comments to the Federal Financial Institutions Examination Council (FFIEC) on proposed new guidelines that regulated financial institutions offering reverse mortgages would need to follow to better manage compliance and reputation risks.

With the exception of California and Minnesota, all states and the District of Columbia have now passed laws implementing new licensing guidelines for mortgage loan originators as mandated by the SAFE Act.

Compliance requirements for reverse mortgages are fast stacking up on lenders as a new set of rules for the product are being embraced by states nationwide.