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Change heats up with the Financial Assessment and younger co-borrowing spouses
The remaining months of summer are certain to accelerate further changes to the federally insured reverse mortgage program. First is the long anticpated and often delayed Financial Assessment. In its effort to stem the tide of reverse mortgage foreclosures due to technical defaults resulting from nonpayment of property taxes and insurance HUD will provide clear guidelines to measure a borrowers financial capacity to meet such ongoing obligations. Last month at the National Reverse Mortgage Lenders Association regional conference in San Diego HUD’s Director of Single Family Program Development Karen Hill said the agency is making progress and anticipates…
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Being a realist, one must look at how we are doing. Endorsements for June are below 4,000 for the first time this fiscal year. Based on the monthly volume of case number assignments (CNAs) through April 2014, the trend at this point forecasts a worse fiscal endorsement total for fiscal year 2014 than any fiscal year since fiscal year 2005 but the difference should be less than 2,000 endorsements.
We will know far more when HUD releases the CNA volume for May 2014. The good news is that the CNA volume on the current HECM has been growing since October 2013; however, unless the CNA volume for May exceeds 10,000, it is highly unlikely that the endorsement total for this fiscal year will exceed our worst fiscal year total since fiscal year 2005, fiscal year 2012.
The slightly improved PLFs should translate into better CNA volume until we see financial assessment (FA). Since fiscal 2014 is a year of introduction of the Extreme Summit (ES) to the public, there is hope that the expansion of the ES in fiscal will more than offset endorsement volume drops from FA during fiscal 2015.
The anecdotes on the ES webinar last month were measured at best. Hopefully the ES kickoffs go far more smoothly. As to acceptance of the higher PLFs after 8-3-2014, my prospects are being pleasantly surprised.