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New Rule May Require Seasoning of New HELOCs
With the recent release of HUD’s Financial Assessment guidelines our focus was primarily centered on the new requirements future borrowers will have to walk through to qualify for a federally-insured reverse mortgage or Home Equity Conversion Mortgage. The scope of this long anticipated policy overshadowed one key requirement: the seasoning of existing non-HECM liens to be paid off. This pivotal requirement will go into effect for loans with case numbers issued on or after December 15th of this year. What is a typical non HECM lien? How about the common home equity line of credit or HELOC. That’s correct, if your prospective borrower has recently taken out a HELOC they may have to wait before they can qualify for a reverse mortgage.
Let’s examine this more closely. Mortgagee Letter 2014-21 specifies that…
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