It has recently been announced that HUD (The Department of Housing and Urban Development) will be releasing two mortgagee letters in the next few weeks. One will outline new changes to their policy on Non Borrowing spouses and the other will be in regards to the upcoming financial assessment. We have been anticipating these for quite some time. They will have a tremendous impact on the industry. Many borrowers who might qualify now will not and many who were afraid to do the loan with a Non Borrowing Spouse may now rest easy knowing that the loan is safer depending on what is released in this mortgagee letter.
Check out our latest video blog about New Guidelines for Reverse Mortgage Non Borrowing Spouses
HUD has announced the release of an update to the current NBS rules within the next few weeks. We know that the new rules will take the Non Borrowing Spouses age into account and the benefit amount/loan amount will be based on that age even if it is less than 62 which is the current minimum age to be a reverse mortgage borrower. We will all be waiting to see what safety measures this will have for the NBS. In the past it has been discussed that this might add the ability of the NBS being allowed to also live out their days in the home and not be affected by the death of the borrowing spouse. In the next few weeks we will all know. Check back as we will be discussing it as soon as the details are released.
HUD has also mentioned the implementation of the financial assessment that has been expected for some time and was delayed in January. Around the same time as the release of the new NBS rules HUD is set to release the new rules and regulations surrounding the reverse mortgage financial assessment. There has been talk of a 90 day of implementation once it is announced though. That will help loan officers have time to speak to clients who may not qualify after the financial assessment and get them in process. As long as you have completed an application and received a case number before the implementation you will not be subject to the financial assessment regardless of when it’s implemented unless your case number is allowed to expire. Case numbers normally expire within 120 days but can last longer depending on the situation. Check back soon to get the details of both of these changes once they are released.