NRMLA Eastern Regional Conference

Transcription

1 NRMLA Eastern Regional Conference HECM Tax and Insurance Presentation Federal Housing Administration s Home Equity Conversion Mortgage Update March September 19, , 2010

2 Topics of Discussion Sequestration (Karin Hill) Policy Update (Karin Hill) FHA Strategic Priorities HECM Challenges and Next Steps Recent HECM Policy Chances Housing Counseling Update (John Olmstead) Servicing Update (Lisa Simms) Claims Update (Shawn Ford) Appendix 2

3 Sequestration Impact Furloughs for HUD staff Likely Hiring Freeze HUD contracts could be impacted Help Desk FHA System Updates Manual Reports May experience delays in: Processing mortgage insurance applications Processing insurance claims FHA approval and recertification Origination and servicing inquires Counseling Grants could be impacted Training and Travel will be limited Web link to download information on HUD s Sequestration: 3

4 FHA Key Strategies Continue to play Counter Cyclical Role while supporting increased private market participation MMI Fund Health Risk Management Existing Book of Business -Servicing and Asset Management New Originations Credit Policy FHA Mission Providing access to credit for underserved borrowers 4

5 Protecting the MMI Fund Recent Policy Changes Changes to Annual Mortgage Insurance Premiums and Cancellation of Annual MIP Manual Underwriting for Loans with Decision Credit Score < 620 and Total Fixed Payments to Effective Income Ratio > 43% HECM Consolidation of Pricing Options and Principal Limit Factors for Fixed Interest Rate Mortgages Maximum 95% LTV for loans over $625,500 5

6 Endorsements (Thousands) Endorsements by Cohort 140 HECM Endorsement Volume FY 1990 FY Cohort Maximum Claim Amount (in Billions) $ 6.9 $ 8.9 $ 17.9 $ 24.6 $ 24.2 $ 30.1 $ 21.1 $ 18.2 $ 13.2 Data as of August 31,

7 FY 2013 HECM Endorsement Volume HECM Standard vs. HECM Saver HECM Standard HECM Saver 6% 94% 7

8 HECM Endorsement Volume FY FY 2013 HECM Interest Rate Type 100% 90% 2% 12% 80% 70% 60% 69% 68% 69% 73% 50% 40% 98% 88% Fixed ARM 30% 20% 10% 31% 32% 31% 27% 0% FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY

9 HECM Program Structure Challenges and Next Steps Use of lump sum initial draws at origination under the Fixed Rate Programs v. access to equity over time Use of the program as an immediate solution to address debt problems v. access to equity over time Borrower inability to comply with mortgage requirements Payment of Property Charges, Property Maintenance Lack of financial and credit assessment to analyze whether the HECM program is a viable option for the borrower Lack of ability to limit draw and payment options available to borrower to ensure future access to funds Need for additional Loss Mitigation/Asset Management tools for HECMs 9

10 Challenges and Next Steps Issues of uncertainty Program Structure Changes Volume Cap True Sale Issues Non-Borrowing Spouse Counseling Funding and Availability 10

11 Challenges and Next Steps Primary Policy Changes Under Consideration Draw limits design draw structure to support access to equity over time with some option for borrowers to draw sufficient funds to pay off required liens/charges Escrow/Set Asides required for payment of property charges Financial and Credit Assessment Guidelines to support evaluation of borrower capacity and willingness to comply with the mortgage terms and conditions Three Options to implement Future Changes Legislative Authority to implement changes via a Mortgagee Letter or Federal Notice Proposed Rule Interim Mortgagee Letters 11

12 Published Mortgagee Letters Mortgagee Letter , HECM Program Consolidation of Pricing Options and Principal Limit Factors for Fixed Interest Rate Mortgages April 1, 2013 effective date HECM Saver will serve as the initial premium option for all fixed interest rate mortgages HECM Saver PL factor table must be used to determine the principal limit amount Applicable to all transaction types: traditional, refinance and purchase All fixed interest rate HECM Saver loans must close on or before July 1,

13 Published Mortgagee Letters Cont d Mortgagee Letter , HECM Program Amended Late Request for Endorsement Procedures April 1, 2013 effective date Lenders must certify to the following, when a FHA case binder is not received by the local HOC within 60 days of closing or disbursement: all payments to the borrower(s) have been made in accordance with timeframes specified by the payment option; the mortgage insurance premiums, late charge and interest due have been remitted; and the borrower is current in paying their property charges, i.e., taxes, ground rent, flood and hazard insurance premiums, and special assessments, etc. 13

14 Housing Counseling 14

15 Office of the Deputy Assistant Secretary Deputy Assistant Secretary Sarah Gerecke Associate Deputy Assistant Secretary VACANT Office of Policy and Grant Administration Director Brian Siebenlist Deputy Director Kristin Johnson Office of Outreach and Capacity Building Office Director VACANT Deputy Director Jerrold Mayer Office of Oversight & Accountability Office Director Cheryl Appline Deputy Director VACANT Division Director Emelda Kennerly Deputy Director Lorraine Griscavage-Frisbee Division Director Phyllis Ford Deputy Director Carolyn Hogans 15

16 Authority to Establish The HUD Office of Housing Counseling Dodd-Frank Wall Street Reform and Consumer Protection Act required HUD to establish an Office of Housing Counseling - Launched October 1, 2012 The Act prescribed changes for the Housing Counseling Program: Streamlining all aspects of the program, including the grant application process Certify housing counselors through written examination Create an Advisory Committee to provide strategic planning and policy guidance Implement standards for Program Approval, Materials, Training, Testing and Counselor Certifications Certify software systems for consumers to compare mortgage products to individual financial situations 16

17 Office of Housing Counseling Goals Streamline the NOFA process Improved communication through The Bridge and HUD housing counseling listserv Increase remote monitoring Approve agencies up to a three year period based on several factors More training on HUD program requirements Improve metrics to report long term results of housing counseling 17

18 Offices Within the Office of Housing Counseling Office of the Deputy Assistant Secretary The mission of the Office of the Deputy Assistant Secretary is to provide leadership and vision, to help consumers assess their financial situation and achieve their housing goals. Office of Policy and Grant Administration The mission of the Office of Policy and Grant Administration is to create a stronger, more sustainable framework and infrastructure for HUD s Housing Counseling Programs. Responsible for: Housing Counseling Notice of Funding Availability (NOFA) administration; developing regulations; measuring and reporting housing counseling impact, and research. 18

19 Offices Within the Office of Housing Counseling - Cont d Office of Outreach and Capacity Building Mission is to train and certify housing counselors and increase public awareness of HUD s housing counseling programs. Will assemble an Advisory Committee mandated by Dodd-Frank legislation. Will provide technical assistance to HUD counseling agencies as needed and requested. Will analyze the compliance and effectiveness of HUD-approved agencies and counselors, and will provide training to agencies as needed. 19

20 Offices Within the Office of Housing Counseling Cont d Office of Oversight and Accountability Mission is to ensure quality and effective counseling services through monitoring and certification of HUD-approved agencies and counselors. Will gather data and prepare reports on the activities and outcomes of housing counseling agencies. Will assist in developing policy and regulations for the OHC and recommend/implement sanctions for noncompliance of such regulations. 20

21 Housing Counseling Network Currently a total of 2,406 approved or participating counseling agencies. 129 agencies provided HECM Counseling. This includes the 9 National Intermediaries and their Affiliates/Sub-Grantees. 40 agencies comprised the bulk of the HECM counseling session with 60.6 % done by 10 agencies based on current data. A total of 629 HECM counselor are active of the 1,224 currently approved. Data as of February 28,

22 FY 2012 HECM Counseling Grant Funds $36M for Comprehensive Grants $4M for HECM Supplemental Grants $2M for Training Grants 9 National Intermediaries and 58 Local Housing Counseling Agencies Awarded HECM Supplemental Funds Agencies can use Comprehensive Grant funds to fund HECM counseling sessions FY 11 FY 12 FY 13 Certificates issued 116,999 98,009 44,554 Endorsements 54,822 73,131 22,113 Data as of February 28,

23 FY 2013 Counseling Funding $19.5M for All Housing Counseling (pre-sequester) $1.1M for Housing Counseling Training No Supplemental HECM funding in this year s NOFA Agencies can use award for all counseling categories including HECM Streamlined grantee application process, less burdensome to the applicants 23

24 HECM Demographic Percentage of Clients by Age Group From 10/1/11 to 2/28/ % % 85> 8% 62< 2% % % < % % % % % 85> 6.45% 24

25 HECM Demographics Income Breakdown - Monthly Effective From 10/1/11 to 2/28/13 < $ % $500 to $9, % $10,00 to $14,999.89% $15,000 to $24,999.31% $25,000 to $34,999.05% $35,000 to $49,000.03% $50,000 >.005% *No income information provided for 23.98% 25

26 Office of Housing Counseling Recent HECM Guidance Lender steering clients to specific counseling entities Lender participation in client counseling sessions Lenders providing clients with advance answers to counselors required questions Counselors reminded of the HECM protocol requirements to insure quality of counseling session 26

27 Servicing Update 27

28 Home Equity Reverse Mortgage Information Technology (HERMIT) Mortgagee Letter , Home Equity Reverse Mortgage Information Technology for the HECM Program, dated September 11, 2012 System Implementation: October 9, 2012 System Enhancement Release: January 28, 2013 Benefits: One common platform B2G capabilities for posting transactions and transferring cases flexible enough to allow manual entry as needed Interact with NSC through new, controlled workflow process Automated claims processing 28

29 Home Equity Reverse Mortgage Information Technology (HERMIT) Cont d HECM Delinquency Reporting Servicers must enter historical and current pre- due and payable property charge advances and repayments in HERMIT B2G or Manual HUD has agreed to a two month extension to the original six months allotted to enter data in HERMIT MIP Late Charges and Interest waived Excel spreadsheets no longer required once all pre-due and payable property charge advances and repayments have been entered in HERMIT 29

30 Servicing Reminders Regulations require HUD notification: When a condition making the HECM loan due and payable occurs Date of borrower s death or conveyance of title to be entered into HERMIT. Due and payable requests, where HUD approval is required, submitted via HERMIT. Within 30 days of initiating foreclosure Date foreclosure commenced to be entered into HERMIT. 30

31 HERMIT Endorsed Compliance, Bankruptcy, Foreclosure and Release Monitoring Bankruptcy Chapter 7 Bankruptcy Chapter 13 Foreclosure Insurance Flood Policy Insurance Forced Placed Insurance Hazard Policy Occupancy Compliance Certification Repairs Release 2 nd Mortgage Taxes Delinquent 31

32 HERMIT Endorsed Disposition Monitoring Due and Payable w/o HUD approval Loss Mitigation Deed-in-Lieu Loss Mitigation Family Sale Pending Loss Mitigation Pre-Foreclosure Loss Mitigation Short Sale 32

33 HERMIT Endorsed Servicing Requests Consent of Lien Holder Due & Payable w/hud Approval Extension Claim Filing Extension Deed-in-lieu Extension Repairs Extension Request to Delay Foreclosure Investor Short Sale Partial Release Payoff Request Preservation & Protection Request for HUD Advance (Assignment) Subordination 33

34 Claims Update 34

35 FY 2013 HECM Claims Processed (HERMIT & Paper) $ 895 million disbursed 8,591 claim transactions processed: Foreclosure/Deed-in-Lieu 61% Assignments 23% Mortgagor s Sale 9% 35

36 HECM Claim Processing - Paper Outstanding paper claim packages: Majority of original paper claims now processed and paid. If the original claim was filed and paid via paper, then the supplemental must also be filed via paper. HECM supplemental claims must be received within 6 months of original claim settlement date. HERMIT functionality for supplemental claims is not yet active. HECM paper claim questions? FHA_SFClaims@hud.gov 36

37 HERMIT Claim Submission HERMIT Servicing Module User Guide Refer to Chapter 8, Claims HERMIT auto-populates data to claim form fields Servicer must upload servicing activities and expenses to HERMIT prior to creating claims timeline If an expense is NOT present in HERMIT, it will not appear on the submitted claim form. 37

38 APPENDIX 38

39 Lender & Counseling Resources Office of Housing Counseling web page: counseling questions or comments to: HECM for Lenders Page elenders HUD Office of Housing Counseling For Counselors 39

40 Additional Counseling Resources Neighborworks has updated it s website Resources for prospective HECM counselors, Active HECM Counselors and Consumers NCOA has launched a new Consumer website Information, tools and resources for consumer New HECM Exam site, Hosted and Managed by PAVR Software Solutions LLC 40

41 HERMIT Resources The HERMIT User Guide contains the latest updates and resources related to the HERMIT System. Web address: ng/sfh/hecm/hermit_user_guide Contact HERMIT Help Desk for all questions about HERMIT and to report system/data issues: HERMIT Help Desk or 41