[PPT] - Home Equity Conversion Mortgage Update November 12, 2020 Presented PowerPoint Presentation

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Kasey Watson Program Director National Servicing Center Single Family Housing

National Reverse Mortgage Lending Association 2020 Annual Meeting

Home Equity Conversion Mortgage Update

November 12, 2020

Presented by: Joseph M. Gormley Deputy Assistant Secretary for Single Family Housing Joshua Miller Senior Advisor Office of the Deputy Assistant Secretary for Single Family Housing

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Agenda Originations

Opening Remarks COVID-19 / FHA Catalyst

Endorsements

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Servicing

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[Transition Slide Title/Section Title 1]

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COVID-19 / FHA Catalyst

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In response to the Presidentially-Declared COVID-19

National Emergency, FHA issued the following Mortgagee Letters (MLs):

– ML 2020-05 Re-verification of Employment and Exterior-Only and Desktop- Only Appraisal Scope of Work Options for FHA Single Family Programs Impacted by COVID-19

▪ Extended in ML 2020-14, ML 2020-20, ML 2020-28, and ML 2020-37

– ML 2020-07 FHA Catalyst: Case Binder Module - Single Family Forward and Home Equity Conversion Mortgage (HECM) Electronic Submission – ML 2020-24 Revision of Effective Date for COVID-19 Multisubject: Updated Temporary Guidance for Verification of Self-Employment; Rental Income; 203(k) Rehabilitation Escrow Account – ML 2020-29 FHA Catalyst: Case Binder Module – Expanded Functionality and Updated Case Binder Submission Requirements for Federal Housing Administration (FHA) Post-Endorsement Loan Reviews

Fiscal Year 2020 Accomplishments

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Instituting a foreclosure and eviction moratorium for all homeowners with FHA-

insured mortgages. This moratorium, consistent with Coronavirus Aid, Relief, and Economic Security (CARES) Act, is currently in place through December 31, 2020.

Providing up to 12 months of mortgage payment forbearance for homeowners

with FHA-insured mortgages who request this assistance from their mortgage servicer.

Instituting pandemic specific loss mitigation home retention options to assist

homeowners post-forbearance to bring their mortgage payments current and avoid future foreclosure.

Instituting temporary waivers to multiple policies that require lenders, servicers,

appraisers, and other program participants to have in-person contact with

borrowers. These measures were designed to ensure that FHA-insured lending

would continue despite social distancing and remote work.

Mitigating the Effects of COVID-19

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We could not have endorsed HECM loans without FHA

Catalyst

Over 23,000 initial HECM submissions
Estimated that endorsement of loans are about 20 percent

faster with FHA Catalyst

More improvements planned
Notice of Return (NOR) – Incomplete files are returned

FHA Catalyst

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LIBOR Transition
HECM Section of Single-Family Housing Policy Handbook

4000.1

Portfolio Performance Monitoring
System Updates

Fiscal Year 2021 HECM Origination Priorities

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Over 275,00 active adjustable-rate, LIBOR-indexed HECMs
Over 95 percent of new endorsements use the LIBOR index
HUD Working Group

– External engagement (Alternative Reference Rates Committee, Consumer Financial Protection Bureau, NRMLA) – Internal engagement (Ginnie Mae, Office of Housing Counseling, Office of Risk Management and Regulatory Affairs, Office of Policy Development and Research)

LIBOR Index Replacement

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2/5/20 – Fannie Mae LL - all LIBOR ARMs must be

purchased as whole loans on or before Dec. 31, 2020, or in MBS pools with issue dates on or before Dec. 1, 2020.

2/5/20 - Freddie Mac will not purchase any LIBOR-indexed

ARM with an Application Received Date on and after October 1, 2020.

9/20/20 – Ginnie Mae APM - Restrictions on LIBOR-Based

Adjustable Rate Reverse Mortgages [HECM/HMBS]

LIBOR Index Replacement

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[Transition Slide Title/Section Title 1]

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Origination

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FY18 FY19 FY20 3Q Certificates Issued 61,258 60,082 50,489

The difference between the figures above is primarily due to lag time between receipt of the certificate, potential eligibility issues, and the client’s decision to pursue a HECM.

HECM Counseling Activity Levels Update

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HECM Case Number Assignments

Year-Over-Year Monthly Comparison

Source: Single Family Data Warehouse
Data as of September 30, 2020

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HECM Case Number Assignments

By Product Type

Source: Single Family Data Warehouse
Data as of September 30, 2020

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[Transition Slide Title/Section Title 2]

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Endorsement

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HECM Endorsements – Volume

3Q

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HECM Endorsements - By Product Type

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HECM Endorsements - By Rate Type

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HECM Endorsements - By Plan Option and Fiscal Year

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[Transition Slide Title/Section Title 2]

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Servicing

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Fiscal Year 2020 Accomplishments

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In response to the Presidentially-Declared COVID-19

National Emergency, FHA issued the following Mortgagee Letters (MLs):

– 2020-04 Foreclosure and Eviction Moratorium in connection with the Presidentially-Declared COVID-19 National Emergency

▪ Extended in ML 2020-13 and ML 2020-19

– ML 2020-06 FHA’s Loss Mitigation Options for Single Family Borrowers Affected by the Presidentially-Declared COVID-19 National Emergency in Accordance with the CARES Act

▪ Extended in ML 2020-34

– ML 2020-12 Updated Guidance for Home Equity Conversion Mortgage (HECM) Claim Type 22 (CT-22) Assignment Claims during the COVID-19 National Emergency

HUD also published key HECM regulatory and policy waivers to

address Borrower and Mortgagee impacts

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Fiscal Year 2021 HECM Servicing Priorities

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LIBOR Transition
HECM Section of Single-Family Housing Policy Handbook

4000.1

Procurement of Secretary-Held HECM Servicing contractor
System Updates

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Incoming Assignment Requests Fiscal Year 2020 Through Quarter 3

Key Assignment Statistics

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4,157 3,908 3,564 3,611 3,421 3,318 3,540 3,284 2,951

500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20

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Incoming Assignment Requests FY2013 – Quarter 3 FY2020

Key Assignment Statistics (cont.)

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1000 2000 3000 4000 5000 6000 7000 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18 Dec-18 Feb-19 Apr-19 Jun-19 Aug-19 Oct-19 Dec-19 Feb-20 Apr-20 Jun-20

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Portfolio Size Fiscal Year 2013 – Quarter 3 Fiscal Year 2020

Secretary-Held Portfolio

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18153 23538 33305 49294 65291 87917 125941 146682 20000 40000 60000 80000 100000 120000 140000 160000 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020

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[Transition Slide Title/Section Title 1]

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Additional Information

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SF Handbook Information:

https://portal.hud.gov/hudportal/HUD?src=/program_offices/ho using/sfh/handbook_4000-1

Upcoming Single Family Housing Events and Training :

https://www.hud.gov/program_offices/housing/sfh/events

Subscribe to FHA INFO:

https://portal.hud.gov/hudportal/HUD?src=/program_offices/ housing/sfh/FHA_INFO_subscribe

Helpful Links

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Option Point of Contact Hours Available Comments

FHA Knowledge Base – FAQs www.hud.gov/answers 24/7/365 Knowledge Base web page includes option to email questions. Email answers@hud.gov 24/7/365 Telephone 1-800-CALL-FHA (1-800-225-5342)

Persons with hearing or speech impairments may reach this number by calling the Federal Relay Service at 1-800-877-8339.

8:00 AM to 8:00 PM Eastern M-F Voicemail is available after hours or during extended wait periods.

FHA INFO emails: Frequent email notifications of new policies and training opportunities for anyone who signs up. Subscribe at: https://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/FHA_INFO_subscribe

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FHA Resource Center

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