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1. 

   The_Cynic

   February 2, 2018 at 6:02 pm

   It is interesting how Scott talks about a longer life with a HECM. Yet the life of a HECM will NOT change under Mortgagee Letter 2017-12. It is the same old story once the balance due hits 98% of the maximum claim amount, lenders can either hold the loan until termination or assign it to HUD. Their overall life expectancy should not change in any way.

   However, in the secondary market, the lender must purchase the loan from a GNMA security when it reaches the point of assignment. So in the eyes of the secondary market, lower over all accrual rates means the HECM is in the security that much longer. So it is not from eyes of the lender, FHA, the originator, or the borrower, Scott is speaking but rather the eyes of the secondary GNMA investment community although the vlog is directed at us the originating community.

   Many times the terminology and concepts expressed by participants in the HECM community show how out of touch they are with originators. This is one example.

   So in our eyes the life of a HECM will most likely be only marginally different, if different at all. While in the eyes of the investment community it will in all likelihood be longer. As beauty is in the eyes of the beholder, so is the useful life of a HECM.

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