NRMLA Requests Changes & Delay in Implementing Financial Assessment
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The Financial Assessment is a game-changer for the Home Equity Conversion Mortgage Program. For the first time since the program’s inception in 1989 the reverse mortgage will be treated like any other FHA mortgage…that is underwriting to reduce risk of borrower default. Here are a few highlights from the letter. 1- In the process of measuring a borrower’s financial capacity to meet the obligations of paying ongoing property charges the assessment excludes the income of non-borrowing spouses or family members not listed on the loan yet HUD requires the inclusion of jointly held debt (even non-borrowing spouses). NRMLA asks for an even playing field including this household income if household debt is counted against their capacity to repay. 2- Available proceeds (line of credit) or future tenure payments after closing should be included when calculating the borrowers future income which helps determine their capacity to meet property obligations.