FHA recently published Mortgagee Letter 2022-23 establishing a new property charge repayment plan option for senior homeowners with HECMs who are behind on their property charge payments due to the effects of COVID-19. The provisions of the Mortgagee Letter are effective as of December 15, 2022.
Under the COVID-19 Home Equity Conversion Mortgage (HECM) Property Charge Repayment Plan (the “Plan”), mortgage servicers can offer eligible homeowners up to 60 months to repay property charges advanced by the servicer. The Plan policies include:
- Making the Plan available to borrowers who have applied for Homeowner Assistance Fund (HAF) assistance if the HAF funds combined with the borrower’s ability to repay will satisfy the servicer’s advances for the delinquent property charges;
- Making the Plan available to borrowers regardless of whether the borrower has been unsuccessful on a prior repayment plan or whether the borrower owes more than $5,000 in property charge advances;
- Requiring the borrower to provide only a verbal attestation that they have been impacted by COVID-19; and
- Allowing Mortgagees to initiate the Plan no later than one year following the expiration of the COVID-19 National Emergency, without requiring the default to have occurred during the National Emergency.