|HUD No. 18-124|
HUD Public Affairs
October 22, 2018
FHA ANNOUNCES STREAMLINED CLAIM PAYMENT REQUIREMENTS
IN HOME EQUITY CONVERSION MORTGAGE PROGRAM
Action intended to speed reverse mortgage claim payments
WASHINGTON – The Federal Housing Administration (FHA) today announced revised requirements for Home Equity Conversion Mortgage (HECM) servicers when they assign FHA-insured reverse mortgages to the agency for claim payment.
Effective immediately, FHA-approved HECM servicers can use alternative supporting documentation in lieu of previously required materials that, in many instances, delayed claim processing. Read FHA’s Mortgagee Letter.
FHA Commissioner Brian Montgomery said, “Streamlining the HECM claim payment process makes us more responsive to participating lenders and helps continue our effort to put the program on a more financially viable path.”
FHA’s new HECM claims payment requirements will ensure lenders participating in the program are not unduly burdened when seeking claims payments when the HECM reaches 98 percent of its maximum claim amount. By streamlining the requirements and relaxing the documentation burden during the claims process, FHA is seeking to reduce the time required to make timely claims payments to servicers.