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Many Originators Seeking Clearer Guidance Under Assessment
Your applicant’s credit history isn’t so rosey. A smattering of late payments on credit accounts, an overdue property tax installment or problematic medical bills. Such issues often require an explanation of extenuating circumstances.
The HECM Financial Assessment has transformed the process of originating reverse mortgages and consequently complications will arise, often around the issue of extenuating circumstances. Extenuating circumstances put quite simply are factors that explain the underlying reasons for blemishes in the applicant’s credit history. This is key as the credit history and payments help determine the borrower’s ‘willingness and capacity’ to meet the ongoing obligations of the loan.
HUD notes that lenders must make a “connection between the specific occurrence(s) and the measurable impact on the occurrence(s) on the mortgagor’s finances”. Quite honestly it is a subjective process.
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