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FHA INFO #16-44: Mortgagee Letter 2016-10

Investor Update
July 13, 2016

Revised HECM Financial Assessment and Property Charge Guide and Other HECM Updates in Mortgagee Letter 2016-10

Today, the Federal Housing Administration (FHA) published Mortgagee Letter 2016-10, Home Equity Conversion Mortgage (HECM) Program – Servicing Fee Set-Aside Growth Rate; Third Party Property Tax Verification Fees; and Financial Assessment and Property Charge Guide. This Mortgagee Letter:

  • Announces and transmits an updated HECM Financial Assessment and Property Charge Guide;
  • Revises the calculation of the growth rate (compounding interest rate) for HECM Servicing Fee Set-Asides to use the Note Rate; and
  • Adds the Third Party Property Tax Verification Fee to the list of allowable fees and charges.

The revised Financial Assessment and Property Charge Guide and the Servicing Fee Set-Aside policy become effective for FHA case numbers assigned on or after October 3, 2016. The Third Party Property Tax Verification Fee update is effective for FHA case numbers assigned on or after today, July 13, 2016.

FHA will host an industry briefing conference call to review the details in Mortgagee Letter 2016-10 on July 21. Additional information is included at the end of this FHA INFO.

Revised HECM Financial Assessment and Property Charge Guide
During the past year, FHA has gained additional insights into the practical application of its HECM Financial Assessment and Property Charge policies that became effective for FHA case numbers assigned on or after April 27, 2015. Based on this experience, FHA is making additional revisions to the HECM Financial Assessment and Property Charge Guide. These revisions include:

  • Updates to reflect applicable forward mortgage policy changes that have been made to the Single Family Housing Policy Handbook 4000.1 subsequent to the Guide’s November 2014 publication;
  • More specific guidance for several components of the Financial Assessment; and
  • Additional criteria for evaluating Compensating Factors in completing the Residual Income analysis to ensure HECM borrowers can comply with HECM requirements and stay in their homes long term.

The revised Financial Assessment and Property Charge Guide is attached to Mortgagee Letter 2016-10, and becomes effective for FHA case numbers assigned on or after October 3, 2016. The current Guide, in effect for case numbers assigned through October 2, 2016, remains accessible from HUD’s Client Information Policy Systems (HUDCLIPS) web page and the HECM for Lenders web page.

FHA Systems Changes Required
To support certain revisions contained in Mortgagee Letter 2016-10, FHA will implement changes to both its FHA Connection (FHAC) and Home Equity Reverse Mortgage Information Technology (HERMIT) systems to coincide with the effective dates noted in the Mortgagee Letter. FHA will communicate additional information about the FHAC and HERMIT systems changes in the future.

Industry Briefing Conference Call on July 21
FHA-approved mortgagees and other stakeholders are invited to attend an industry briefing conference call on July 21. During this call, FHA subject matter experts will provide an overview of the revisions contained in Mortgagee Letter 2016-10.

  • Title: HECM Mortgagee Letter 2016-10
  • Date: July 21, 2016
  • Time: 2:00 PM – 3:00 PM (Eastern)
  • Dial-in: (866) 254-5935
  • Access Code: 397712

Mortgagees may submit questions in advance of this call to FHA’s special e-mail box, FHASFCall@hud.gov, by July 19. Please limit your submissions to two questions, which FHA subject matter experts will consider for responses during the call. Please note that this is an unattended e-mail box to be used only for submitting questions concerning Mortgagee Letter 2016-10. FHA will be unable to respond in writing to individual questions or inquiries submitted to this e-mail box.

Quick Links

Resources

  • Contact the FHA Resource Center:
    — Visit our online knowledge base to obtain answers to frequently asked questions 24/7 at: www.hud.gov/answers.
    — E-mail the FHA Resource Center at answers@hud.gov. Emails and phone messages will be responded to during normal hours of operation, 8:00 AM to 8:00 PM (Eastern), Monday through Friday on all non-Federal holidays.
    — Call 1-800-CALLFHA (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.

Source: HUD

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CEO

Alan Jaffa

Alan Jaffa is the Chief Executive Officer for Safeguard Properties, steering the company as the mortgage field services industry leader. He also serves on the board of advisors for SCG Partners, a middle-market private equity fund focused on diversifying and expanding Safeguard Properties’ business model into complimentary markets.

Alan joined Safeguard in 1995, learning the business from the ground up. He was promoted to Chief Operating Officer in 2002, and was named CEO in May 2010. His hands-on experience has given him unique insights as a leader to innovate, improve and strengthen Safeguard’s processes to assure that the company adheres to the highest standards of quality and customer service.

Under Alan’s leadership, Safeguard has grown significantly with strategies that have included new and expanded services, technology investments that deliver higher quality and greater efficiency to clients, and strategic acquisitions. He takes a team approach to process improvement, involving staff at all levels of the organization to address issues, brainstorm solutions, and identify new and better ways to serve clients.

In 2008, Alan was recognized by Crain’s Cleveland Business in its annual “40-Under-40” profile of young leaders. He also was named a NEO Ernst & Young Entrepreneur Of The Year® Award finalist in 2013.

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Esq., General Counsel and EVP

Linda Erkkila

Linda Erkkila is the General Counsel and Executive Vice President for Safeguard Properties, with oversight of legal, human resources, training, and compliance. Linda’s broad scope of oversight covers regulatory issues that impact Safeguard’s operations, risk mitigation, strategic planning, human resources and training initiatives, compliance, insurance, litigation and claims management, and counsel related to mergers, acquisition and joint ventures.

Linda assures that Safeguard’s strategic initiatives align with its resources, leverage opportunities across the company, and contemplate compliance mandates. She has practiced law for 25 years and her experience, both as outside and in-house counsel, covers a wide range of corporate matters, including regulatory disclosure, corporate governance compliance, risk assessment, compensation and benefits, litigation management, and mergers and acquisitions.

Linda earned her JD at Cleveland-Marshall College of Law. She holds a degree in economics from Miami University and an MBA. Linda was previously named as both a “Woman of Influence” by HousingWire and as a “Leading Lady” by MReport.

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COO

Michael Greenbaum

Michael Greenbaum is the Chief Operating Officer of Safeguard Properties, where he has played a pivotal role since joining the company in July 2010. Initially brought on as Vice President of REO, Mike’s exceptional leadership and strategic vision quickly propelled him to Vice President of Operations in 2013, and ultimately to COO in 2015. Over his 14-year tenure at Safeguard, Mike has been instrumental in driving change and fostering innovation within the Property Preservation sector, consistently delivering excellence and becoming a trusted partner to clients and investors.

A distinguished graduate of the United States Military Academy at West Point, Mike earned a degree in Quantitative Economics. Following his graduation, he served in the U.S. Army’s Ordnance Branch, where he specialized in supply chain management. Before his tenure at Safeguard, Mike honed his expertise by managing global supply chains for 13 years, leveraging his military and civilian experience to lead with precision and efficacy.

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CFO

Joe Iafigliola

Joe Iafigliola is the Chief Financial Officer for Safeguard Properties. Joe is responsible for the Control, Quality Assurance, Business Development, Marketing, Accounting, and Information Security departments. At the core of his responsibilities is the drive to ensure that Safeguard’s focus remains rooted in Customer Service = Resolution. Through his executive leadership role, he actively supports SGPNOW.com, an on-demand service geared towards real estate and property management professionals as well as individual home owners in need of inspection and property preservation services. Joe is also an integral force behind Compliance Connections, a branch of Safeguard Properties that allows code enforcement professionals to report violations at properties that can then be addressed by the Safeguard vendor network. Compliance Connections also researches and shares vacant property ordinance information with Safeguard clients.

Joe has an MBA from The Weatherhead School of Management at Case Western Reserve University, is a Certified Management Accountant (CMA), and holds a bachelor’s degree from The Ohio State University’s Honors Accounting program.

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Business Development

Carrie Tackett

Business Development Safeguard Properties