Reverse Mortgage Regulations

On July 20, 2010, HUD issued Mortgagee Letter 2010-22 (ML 10-22) to announce a new HECM Required Documents for Endorsement list.

Following is a list of HECM program contacts at HUD's four regional Home Ownership Centers, and at headquarters.

One Friday last December, NRMLA President Peter Bell received a phone call from the association’s legal counsel, James Brodsky, informing him that the Federal Financial Institutions Examination Council had published draft guidance on reverse mortgages and wanted comments by that Monday.

Based on consumer feedback obtained earlier this year, the Federal Reserve has developed a new set of disclosures to help consumers better understand reverse mortgages and the costs and risks associated with obtaining them.

On August 16, 2010, the Federal Reserve announced final rules regarding loan originator compensation practices. The following executive summary was written by NRMLA's legal counsel, Weiner Brodsky Sidman Kider, P.C.

The Federal Financial Institutions Examination Council (FFIEC) “pre-published” final guidance today that illustrates for federally regulated institutions the potential risks associated with originating and servicing reverse mortgages – especially proprietary products.

On July 28, federal regulators published a final rule requiring mortgage loan originators employed by banking institutions to register with the Nationwide Mortgage Licensing System and Registry.

The Pennsylvania Department of Banking published a statement of policy last week that implements new guidelines for companies under its jurisdiction that originate and service reverse mortgages that includes a suitability standard and determination of mental capacity.

With the exception of California and Minnesota, all states and the District of Columbia have now passed laws implementing new licensing guidelines for mortgage loan originators as mandated by the SAFE Act.

Compliance requirements for reverse mortgages are fast stacking up on lenders as a new set of rules for the product are being embraced by states nationwide.