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FHA INFO #17-04: HECM Final Rule Published (Docket No. FR-5353-F-03); and New Servicing Guidance for FHA-insured Properties Encumbered with a PACE Obligation (ML 17-06)

Investor Update
January 19, 2017

Strengthening the Home Equity Conversion Mortgage Program Final Rule Published Today

Today, the Federal Housing Administration (FHA) published in the Federal Register a final rule, Strengthening the Home Equity Conversion Mortgage (HECM) Program (Docket No. FR-5353-F-03). This HECM final rule is a major milestone that codifies HECM requirements implemented under the authority granted to HUD in the Housing and Economic Recovery Act of 2008, the Reverse Mortgage Stabilization Act of 2013, and statutory authority. The rule updates existing regulatory content, and provides new regulatory guidance that carries forward FHA’s ongoing work to ensure the HECM program is a safe and viable financing option for seniors, usable by mortgagees, and protects FHA’s Mutual Mortgage Insurance (MMI) Fund.

FHA will host an industry briefing conference call to provide an overview of the HECM final rule on February 9, 2017. Details for joining this call are included at the end of this FHA INFO.

Provisions Contained in the Final Rule
The publication of the HECM final rule follows more than three years of work to stabilize the HECM program and reduce risk to the MMI Fund, so that the program remains a sustainable option for seniors. In 2013, Congress passed the Reverse Mortgage Stabilization Act, authorizing FHA to quickly enact policy changes via administrative issuance such as a Mortgagee Letter to address immediate program concerns, with the expectation that FHA would follow with formal rulemaking. The HECM final rule fulfills this commitment, and:

  • Includes FHA’s assessment of public comments received in response to its May 19, 2016, proposed rule;
  • Updates Part 206 of the Code of Federal Regulations in its entirety for the first time since 1989, providing a complete and current source for HECM regulations; and
  • Contains both new policies and revisions to existing policies that become effective on September 19, 2017.

Implementing the Provisions Contained in the Final Rule
The HECM final rule contains both new policies and revisions to existing policies that will require actions on the part of mortgagees, other program participants, and FHA to implement. FHA established an eight-month lead time between the
publication of the final rule and the effective date of the provisions it contains in order to:

  • Provide mortgagees and other program participants the time to understand the contents of the rule, and then
    to begin planning for any necessary process, operational, or systems changes;
  • Allow time for FHA to issue the necessary implementation guidance for mortgagees and other program
    participants; and
  • Complete the necessary system changes that will be required within the FHA Connection system, the Home
    Equity Reverse Mortgage Information Technology system, and other FHA technology systems.

FHA is currently finalizing its implementation approach, and will be communicating more specifics about operational and system changes in the coming months.

Industry Briefing Conference Call on February 9th
Mortgagees and other stakeholders are invited to attend an industry briefing conference call on February 9th. During this call, FHA subject matter experts will provide an overview of the provisions contained in the final rule.

  • Title: HECM Final Rule Overview
  • Date: February 9, 2017
  • Time: 2:00 PM – 3:00 PM (Eastern)
  • Dial-in: (800) 707-9573
  • Access Code: 415732

Mortgagees may submit questions in advance of this call to FHA’s special email box, FHASFCall@hud.gov, by midnight (Pacific), Sunday, February 5th. Questions submitted will be considered by FHA subject matter experts for responses during the call. Please note that this is an unattended e-mail box to be used only for submitting questions for this call. FHA will be unable to respond in writing to individual questions or inquiries submitted to this e-mail box.

Quick Links

New Guidance For Servicing FHA-insured Mortgages Encumbered with a Pace Obligation

Today, the Federal Housing Administration (FHA) published Mortgagee Letter 2017-06, Servicing of FHA-insured Mortgages on Properties Encumbered with a Property Assessed Clean Energy (PACE) Obligation. This Mortgagee Letter provides policies for payment of Property Assessed Clean Energy (PACE) obligation assessments, appraisal of PACE encumbered properties, and property title and conveyance requirements.

This guidance applies to all FHA Title II forward mortgage programs, and the policy revisions are effective immediately. These policy updates will be incorporated into an upcoming update of the Single Family Housing Policy Handbook 4000.1.

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 (FHA INFO #17-04 full version)

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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