Changes to the Federal Housing Administration (FHA)’s Single Family Housing Policy Handbook 4000.1, which incorporates reverse mortgage guidance and prior Mortgagee Letter material, will be coming soon.
Officials are saying they are “at the finish line” with the revisions, according to experts from the U.S. Department of Housing and Urban Development (HUD)’s Office of Single-Family Asset Management, who spoke on Tuesday at the National Reverse Mortgage Lenders Association (NRMLA) Western Regional Meeting in Irvine, California.
The revised handbook is the culmination of years worth of work within the industry and on the part of HUD and FHA.
In late 2021, the FHA announced that it had posted draft Home Equity Conversion Mortgage (HECM) Origination through Servicing sections of its 4000.1 Handbook for review and feedback by stakeholders.
The comments were voluminous, according to Kasey Watson, senior HECM policy advisor in HUD’s Office of Single-Family Asset Management. NRMLA alone has submitted 186 comments on the draft sections over the past couple of years.
All comments have been processed, however.
“We are truly at the finish line,” Watson said. “I know that will be a relief for everyone.”
The news regarding the revised document was met with cheers from attendees at the NRMLA Western Meeting. While a specific date was not provided, Watson said she would be “surprised” if it was not published prior to the end of the year when speaking from her own, personal perspective.
“We’ve all learned in the past few years that crazy things can happen,” she said. “But yes, in my personal opinion, I will be shocked if it’s not going [published by the] end of the year.”
The stakeholder feedback likely impacted HUD’s trajectory on the document. Shortly after announcing the review period in 2021, HUD extended the review period to the end of the year and then extended it again to January 2022.
The statements made on Tuesday were the first clear indication of the progress that has been made on the revised document.
Watson said she is appreciative of the attention given by FHA Commissioner Julia Gordon to the reverse mortgage industry.
“[I appreciate] her focus on the details and the nuance of our program, its processes and working to [make more] liquidity available to the industry,” Watson said. “She is very committed to this and is working personally on it, daily.”
According to Watson, the work is indicative of the commitment the FHA has for serving senior borrowers through the HECM program.
“FHA is very committed to getting the industry through this time of difficulty and liquidity issues, and we’re going to evaluate all the feedback and information we’re getting from the industry,” she said. “We want to get that Handbook out soon also to help increase the liquidity available to the industry.”
