Interim Rule on Home Equity Conversion Mortgages

Effective February 7, 2008 will be an interim rule on Home Equity Conversion Mortgages for maximum credit and eligibility regarding discounted mortgage insurance premium. According to HUD, this rule extends to certain refinanced HECM (Home Equity Conversion Mortgage) Loans, and makes two technical changes to the current HECM program. These include an extension on the date for underwriters in calculating maximum claim amounts in the HECM program from the date of the receipt of the appraisal report to the date of closing. This change will result in a date that is both more easily identifiable and verifiable. Furthermore, the rule corrects for HECM loans that are not in default being assigned anyway to regulatory provisions, and remain in effect, but are not eligible for refinancing with a discounted initial mortgage insurance premium (MIP), which was an unintentional consequence of the previous rule. Instead, the current rule will permit these HECM loans to be refinanced, and thus eligible for the discounted initial MIP. This interim rule will improve the financial situation of elderly homeowners, and therefore compliments the goals of the HECM program.

To read the complete new interim rule, please visit: http://a257.g.akamaitech.net/7/257/2422/01jan20081800/edocket.access.gpo.gov/2008/pdf/E8-32.pdf