) is moving its scheduled new financial assessment for reverse mortgages
to a later date due to technical issues.
The delay in system enhancements forced the FHA to find a new date, its Mortgagee Letter stated on Feb. 12.
The new assessment process was originally set to take off three weeks from now. The aim of the new requirement is to make lenders identify seniors qualified for a government-insured reverse mortgage
using different guidelines.
The FHA said the new date could fall within 30 to 60 days of the original March 2 effective date.
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As explained in its Mortgagee Letter 2014-22
, the guidance requires that lenders consider both a borrower’s willingness and capacity to pay his or her loan obligations, including tax and insurance associated with the property.
“The mortgagee must evaluate the mortgagor’s willingness and capacity to timely meet his or her financial obligations and to comply with the mortgage requirements,” HUD stated in the financial assessment
. “In conducting this financial assessment, mortgagees must take into consideration that some mortgagors seek a HECM due to financial difficulties, which may be reflected in the mortgagor’s credit report and/or property charge payment history. The mortgagee must also consider to what extent the proceeds of the HECM could provide a solution to any such financial difficulties.”
The mortgagee letter also states what documents are needed for all reverse mortgage borrowers. Documentation includes credit history documentation, income verification, asset verification, property charge verification, residual income analysis, documentation of extenuating circumstances or compensating factors and calculations for life expectancy set-asides and residual income shortfall set-asides.
The Federal Housing Administration (