February 2, 2015
HUD/FHA Alters HECM Foreclosure Options
The FHA and HUD have issued a press release announcing new options to avoid foreclosure on HECM homes in cases where the “last surviving borrower” dies but a non-borrowing surviving spouse still occupies the home. According to HUDNo.15-010, the FHA has issued a new policy, “under its Home Equity Conversion Mortgage (HECM) Program giving FHA-approved lenders the option to delay calling HECMs with eligible ‘non-borrowing spouses’ due and payable.” According to the press release, a delay would postpone foreclosure, “normally triggered by the death of the last surviving borrower. FHA’s new guidance will allow reverse mortgage lenders to assign eligible HECMs to HUD upon the death of the last surviving borrowing spouse, thereby allowing eligible surviving spouses the opportunity to remain in the home despite their non-borrowing status.” Last year, | more...
