FHA recently issued Mortgagee Letter 2022-15 which changes the timeline within which mortgagees must notify a borrower’s estate, heirs, or other party with legal title to the property that certain HECMs have become due and payable due to the death of the last surviving borrower. Importantly, Mortgagee Letter 2022-15 modifies provisions under Mortgagee Letter 2015-10, which generally apply only to HECMs with case numbers assigned prior to September 19, 2017.
Under Mortgagee Letter 2022-15, a mortgagee must notify the borrower’s estate that a HECM with a case number assigned prior to September 19, 2017, has become due and payable within 30 days of providing notice of the borrower’s death to the Secretary of HUD. Previously, mortgagees were required to notify the borrower’s estate within 30 days of the date of the borrower’s death. The new due and payable notification requirement applicable to HECMs with case numbers assigned prior to September 19, 2017, is now fully consistent with the due and payable notice required to be sent by mortgagees for HECMs with case numbers assigned on and after September 19, 2017, as announced in HUD’s final regulations adopted on September 19, 2017.
Mortgagee Letter 2022-15 further provides that for HECMs with case numbers issued before August 4, 2014, where the last surviving mortgagor has died and there is a Surviving Non-Borrowing Spouse, mortgagees must follow the notice requirements in Mortgagee Letters 2015-15 and 2019-15.
This Mortgagee Letter may be implemented immediately, but must be implemented no later than 90 days after the date of the Mortgagee Letter for HECMs that become due or payable on or after August 31, 2022.