HECM Program Changes Announced

Alert 13-86 | September 5, 2013 

HECM Program Changes Announced

As you may be aware, the Department of Housing and Urban Development (HUD) announced this week major changes to the HECM program, effective September 30, 2013 (Mortgagee Letter 2013-27). These changes include:

• • Lower PLF tables compared with the current HECM standard program (15% reduction)

  • Consolidation of the HECM Standard and Saver into one new product

  • Limitations on initial disbursements in the first 12 months

  • Changes in the MIP Structure

To submit a HECM loan under the current program guidelines

• • The case number must be issued on or before September 28, 2013

  • The loan must close on or before December 31, 2013

HUD will also be implementing additional changes to the HECM program beginning in January including a Financial Assessment.

In the next two weeks, Liberty will be providing detailed training to help you understand and promote the new HECM program to your customers. 

Since there is a short window for customers to take advantage of the current HECM program, we encourage you to reach out to every prospective borrower as soon as possible to make them aware of the planned HECM changes.