FHA Reverse Mortgage Changes
On June 18, 2014, the Federal Housing Administration (FHA) released two Mortgagee Letters on the Home Equity Conversion Mortgage (HECM) program. The first Mortgagee Letter, ML 2014-10, reminds mortgagees of FHA’s requirements prohibiting misleading or deceptive advertising, including in descriptions of the HECM program. The second Mortgagee Letter, ML 2014-11, addresses risk associated with certain fixed interest rate products. FHA will only insure fixed interest rate reverse mortgages where the homeowner is limited to a single, full draw made at closing.