The Department of Housing and Urban Development published a revised copy of the Single-Family Handbook 4000.1, which includes changes to the HECM section.
Here is a link to the revised 4000.1. Updates are highlighted in yellow.
Go deeper:
- Among the changes discussed in the HECM Handbook was the rounding of interest rates. HUD indicated that a “Mortgagee may round the Expected Rate, or the initial Adjustable-Rate Mortgage (ARM) Note rate, to the nearest one-eighth of one percentage point.”
- The Handbook adds, “The Mortgagee may round both rates, only one rate, or none of the rates, but it must maintain the same rounding throughout the life of the HECM.”
- Ginnie Mae is equally explicit in its issuer guidance that rounding must be done for loans that are pooled into its securities.
- Members are encouraged to consult with their legal/compliance staff in this area, or wholesale investor(s) to determine if the latter has any additional overlays.
The bottom line: NRMLA’s committees will be reviewing the Handbook and reporting to the membership on any noteworthy changes.