On December 15, 2020, New York Governor Andrew Cuomo signed into law a bill that, among other things, requires reverse mortgage lenders in the state to notify the state’s Department of Financial Services (DFS) and mortgagors of an impending foreclosure action on reverse mortgage borrowers. The legal and regulatory regime governing reverse mortgages rapidly evolved … Continue Reading
Borrowers with federally backed mortgage loans facing financial difficulty can breathe a little easier today. All of the federal agencies regulating such loans have announced that they will extend the moratoriums on foreclosure and evictions for single-family properties until December 31, 2020. Federal Housing Finance Agency (FHFA) issued a press release on August 27, 2020 … Continue Reading
On Wednesday, May 13, 2020, Fannie Mae and Freddie Mac unveiled new retention workout options that were jointly developed and “specifically designed to help borrowers impacted by a hardship related to COVID-19 return their mortgage to a current status.” The government-sponsored enterprises’ (GSEs) highly anticipated new COVID-19 payment deferral will allow servicers to defer up … Continue Reading
In a statement released on April 21, 2020, the Federal Housing Finance Agency (FHFA) announced that mortgage servicers would only be required to advance four months of missed payments for Fannie Mae and Freddie Mac owned loans on CARES Act forbearance plans. After that four-month period, FHFA explained the servicers would be under “no further … Continue Reading
In an All Participants Memo dated April 10, 2020 (APM 20-03), Ginnie Mae announced that it revised and expanded its issuer assistance programs in Chapter 34 of the Mortgage Backed Securities Guide (MBS Guide) to include a Pass-Through Assistance Program (PTAP) in response to the COVID-19 national emergency declaration. The program announced in APM 20-03 … Continue Reading
On Friday, President Trump signed the Coronavirus Economic Stabilization Act of 2020 (CARES Act). The significant legislation directs more than $2 trillion into fighting the COVID-19 pandemic and stimulating America’s economy for the duration of the pandemic. This blog summarizes some of the provisions that are most relevant to financial institutions that make or service … Continue Reading
On Tuesday, Fannie Mae and Freddie Mac, in coordination with the Federal Housing Finance Agency, announced relief plans to discourage multifamily landlords from evicting renters from properties as a result of non-payment. In exchange, Fannie Mae and Freddie Mac are allowing multifamily landlords (whose loans are financed by Freddie or Fannie) to defer loan payments … Continue Reading
Operating a financial institution is always a challenge, but the COVID-19 outbreak has triggered a unique set of overlapping and sometimes conflicting concerns for mortgage originators and servicers. Here is what we know as of March 20: On March 18, 2020, HUD issued Mortgagee Letter 2020-04, announcing a 60-day moratorium for foreclosures and evictions, effective … Continue Reading
During a COVID-19 press briefing at the White House on March 18, 2020, President Donald Trump announced that the Department of Housing and Urban Development (HUD) will temporarily suspend “all foreclosures and evictions.” The president made this announcement to provide “immediate relief” to homeowners and renters struggling to make rent and mortgage payments. The president’s … Continue Reading
In an effort to provide clarity and certainty to Federal Housing Administration (FHA) approved lenders, the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Justice (DOJ) jointly issued a memorandum of understanding (MOU) on October 28, 2019, describing broad guidelines about how HUD and DOJ will coordinate using the False … Continue Reading
The U.S. House of Representatives Financial Services Subcommittee on Housing, Community Development, and Insurance convened a hearing on September 25, 2019, to discuss the federal Home Equity Conversion Mortgage (HECM) program, including recently proposed HECM legislation. The subcommittee hearing, titled “Protecting Seniors: A Review of the FHA’s Home Equity Conversion Mortgage Program,” included testimony from … Continue Reading
The U.S. Government Accountability Office (GAO) published two reports on September 25 identifying several weaknesses in the Federal Housing Administration’s (FHA) oversight of reverse mortgages made under the Home Equity Conversion Mortgage (HECM) program (see GAO-19-702 titled “FHA Needs to Improve Monitoring and Oversight of Loan Outcomes and Servicing”; GAO-19-721T titled “FHA’s Oversight of Loan … Continue Reading
The United States Department of Housing and Urban Development (HUD) issued Mortgagee Letter 2019-15, in which it announced several modifications to the Mortgagee Optional Election (MOE) Assignment claim process for Home Equity Conversion Mortgages (HECMs) with FHA case numbers assigned before August 4, 2014. As background, the MOE is a foreclosure deferral program that provides … Continue Reading
After a nearly three-year delay, the U.S. Department of Housing and Urban Development (HUD) has finally released an update to its FHA condominium rules. The new rules, which take effect October 15, 2019, allow for FHA insurance approval on individual condominium units and ease burdensome FHA-insured reverse mortgage application requirements on condos, expanding access to … Continue Reading
Mortgagees of Home Equity Conversion Mortgages (“HECMs,” more commonly known as reverse mortgages) obtained a significant victory in an important federal appellate court, which ruled last month that non-borrowing spouses are not protected from foreclosure by the statute authorizing the HECM program. In Estate of Jones v. Live Well Financial, Inc., the United States Court … Continue Reading
On September 21, 2018, the Department of Housing and Urban Development (“HUD”)’s Office of Inspector General (“OIG”) completed a review of HUD’s partial claims program. In many ways, the title of the OIG audit report, “HUD Did Not Have Adequate Controls To Ensure That Partial Claim Notes for FHA Loans Were Properly Tracked for Future … Continue Reading
