On July 11, FHA announced modifications to certain FHA home equity conversion mortgage requirements in Mortgagee Letter (ML) 2023-15, entitled “Modifications to FHA Home Equity Conversion Mortgage (HECM) Requirements Related to Secretary Payment of Borrower Disbursements Due to Mortgagee Default.” The letter updates FHA’s investigation requirements regarding situations where a mortgage lender is unable or unwilling to fulfill a borrower’s payment obligations required under an HECM. Mortgagees that fail to make a necessary payment to a borrower must now furnish specific information to FHA. The modifications provide additional sources where FHA can receive notice of a mortgagee’s anticipated or actual default on borrower payments and are designed to improve FHA’s ability to make prompt payments in the event of mortgagee default to ensure HECM borrowers timely receive scheduled or requested funds. ML 2023-15 is effective immediately.
