The Federal Housing Administration (FHA) is constant to hunt a brand new servicing contract for Home Fairness Conversion Mortgages (HECMs) sponsored by the federal authorities, however the company stays devoted to offering as a lot extra reduction as doable to reverse mortgage debtors which have been impacted by the COVID-19 coronavirus pandemic.
That is in accordance with Kasey Watson, program director of HECM servicing on the Nationwide Servicing Middle within the U.S. Division of Housing and City Improvement (HUD), addressing reverse mortgage trade gamers on the Nationwide Reverse Mortgage Lenders Affiliation (NRMLA) Digital Annual Assembly & Expo this month.
Reverse mortgage trade stakeholders have continued to hope for a decision to back-end servicing points within the HECM portfolio, and whereas these resolutions haven’t come but, they’re a precedence for FHA in 2021. Moreover, the HECM program can be being focused to profit from numerous updates to FHA’s info know-how (IT) infrastructure, together with modernizing the HECM part of the only household housing 4000.1 handbook.
HECM servicing contract ‘in-process’
Amongst one of many main priorities that the servicing heart has for the HECM program is the procurement of a brand new, HUD Secretary-held HECM servicing contractor, Watson defined. Ahead momentum on securing the brand new contractor in 2020 was stalled by shifting priorities on the Division associated to the response to the COVID-19 pandemic, however stays a prime precedence that’s hoped to be achieved subsequent 12 months, Watson stated.
“For us directly in the national servicing center, one of our biggest priorities for the upcoming year, and one that’s in-progress right now [is] procuring a secretary-held HECM servicing contractor,” Watson defined. “It is a little bit totally different than what we have now completed up to now. Previously, we have now had a single secretary-held servicing contractor for the entire single household FHA-held or secretary-held mortgages that included some ahead mortgages.”
These included from the partial declare program and the ahead loss mitigation program, she stated, in addition to another smaller, extra specialised kinds of mortgages held by the secretary. When it comes to actions that FHA can take to additional stabilize the HECM program, new procurement shall be HECM-specific.
“The present procurement that’s out and [which] we’re at present working via will solely contain servicing of HECM mortgages,” Watson stated. “So, we’re excited for that change, and excited that that procurement is in-process. Of course, as that works through this entire process, I can’t give you any kind of update as far as when we think that will be completed. But it is in-progress, and we’re excited to be moving forward down this new path.”
In a media briefing with reporters simply after the publication of FHA’s annual report, FHA Commissioner Dana Wade declined to debate with RMD any progress on the HECM servicing contract.
“I cannot comment on contracting or procurement, I want to make sure that I am adhering to the federal laws and regulations in this area,” Wade stated.
Following up on earlier feedback from Deputy Assistant Secretary for Single Household Housing Joe Gormley and from Senior Advisor to the Deputy Assistant Secretary within the Workplace of Single Household Housing Dr. Joshua Miller, Watson then turned her consideration to a different main matter of dialog for the reverse mortgage trade within the transition away from the London Interbank Provided Fee (LIBOR) index.
“Again, the LIBOR transition is really a major priority across the entire [HECM] program, but we are really focused on the servicing side into this next year,” Watson defined. “Of course, the goal of everyone is to get the existing HECM loans transitioned away from LIBOR in a way that is not impactful to our borrowers [and] not confusing to them, [so] they understand what’s happening.”
The identical type of philosophy additionally applies in FHA’s efforts to attenuate potential impacts the transition could have on the reverse mortgage trade itself, which presents a significant job for the company.
“[T]hat’s a big challenge that everyone is working on, and I just want to echo Joe [Gormley]’s comments earlier and thank Josh [Miller] for his work that he’s been doing on that,” she stated. “He’s been doing a great job in making sure that the HECM program is in good shape as we move forward through that.”
Each consultant from FHA that spoke to the trade on the NRMLA Digital Annual Convention all mentioned the efforts underway at HUD and FHA to modernize its growing older technological infrastructure to 1 diploma or one other. HUD Deputy Secretary Brian D. Montgomery spoke about how the hope is for extra HECM operations duties shall be folded into the features of FHA Catalyst in 2021, whereas Deputy Assistant Secretary Gormley beforehand defined the need of updating the company’s current know-how capabilities.
“As you’ve heard, the FHA Catalyst platform is part of FHA’s multi-year information technology modernization initiative, and represents a generational leap ahead of our antiquated technology systems,” Gormley stated. “We’ll bring FHA up-to-date with industry best practices and standards, which will provide reliable and accurate data for the full loan lifecycle, and allow more FHA program participants to conduct business more seamlessly in ultimately better supporting the homeowners and communities we all serve.”
Watson elaborated additional, describing the bigger know-how initiative as important to proceed helping aloof FHA’s applications, together with HECM.
“We’re also looking to continue to work on improving FHA systems as related to HECM servicing, so we can accept data in a little bit easier ways for the industry,” she stated. “And then, that would also allow not only easier business processes for the industry in working with FHA, but also [wil give] FHA better access to the data that we need to be able to oversee the program.”