Temporary Partial Waivers of Certain HECM Policies Due to the COVID-19 National Emergency
On October 30, 2020, the Federal Housing Administration (FHA) issued two temporary partial waivers to its Home Equity Conversion Mortgage (HECM) policies that allow mortgagees to be more flexible in submitting HECM Assignment Claims without borrower signatures and in reviewing borrowers for subsequent repayment plans for unpaid property charges, regardless of the total outstanding arrearage.
Waiver of Borrower Signature Requirement for HECM Assignment Claims
This temporary partial waiver of HECM claim assignments policy from Mortgagee Letter (ML) 2017-05 allows mortgagees to submit an Assignment Claim without having to obtain a signature from the HECM borrower on an occupancy certification. Mortgagees are required, however, to continue to obtain annual occupancy certifications from HECM borrowers.
The requirement to obtain a signed annual occupancy certification is being temporarily waived due to difficulties some HECM borrowers may be experiencing in receiving and sending mail and other correspondence due to COVID-19 related difficulties. This temporary waiver is effective through December 31, 2020.
Waiver of Maximum Arrearage for Subsequent HECM Property Charge Repayment Plan
FHA also issued a temporary partial waiver of policy originally introduced in ML 2015-11. This partial waiver builds on the previous HECM COVID-19 repayment waiver, dated April 14, 2020, that expired on October 30, 2020.
It gives mortgagees authority to offer HECM borrowers a repayment plan for unpaid property charges, regardless of the total outstanding arrearage, by waiving certain requirements outlined in ML 2015-11, and allowing them to repay property tax arrearages of any amount if they are unable to make two consecutive payments during the COVID-19 National Emergency. This temporary partial waiver is also effective through December 31, 2020.
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