FHA Issues Temporary Partial Waivers to Its HECM Policies

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The FHA issued two temporary partial waivers to its Home Equity Conversion Mortgage (HECM) policies on September 2, 2021, because of hardships that borrowers have faced during the COVID-19 pandemic. The temporary partial waivers affect Mortgagee Letter 2015-11 and Mortgagee Letter 2016-07 and are effective through June 30, 2022.

The waiver of Mortgagee Letter 2015-11 allows mortgagees to offer repayment plans to HECM borrowers with unpaid property charges regardless of their total outstanding arrearage. The waiver of Mortgagee Letter 2016-07 permits mortgagees to seek assignment of a HECM immediately after using their own funds to pay unpaid property taxes and/or hazard insurance on or after March 1, 2020. Additionally, the waiver eliminates the three-year waiting period for such assignments.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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