FHA Seeks Comments on Proposed HECM Mortgagee Default Requirements

FHA recently posted a draft Mortgagee Letter (draft ML) that would expand FHA’s processes related to actual or anticipated mortgagee default on obligations to a borrower under Home Equity Conversion Mortgages (HECMs) insured by FHA. 

With this draft ML, FHA proposes allowing notice of late payments on HECMs from either the borrower or the mortgagee.  The draft ML also requires that mortgagees provide certain information to facilitate FHA’s payments to the borrower when the mortgagee defaults.

Comments on the draft ML are due by June 12, 2023.