“The confusion here may lie with HUD itself, as it appears to stem from a mortgagee letter HUD issued in 2008 that would have limited lenders’ ability to accept less than the full mortgage balance as payment from family members or heirs. HUD rescinded that letter in 2011 and stated at the time that it would issue a replacement letter, but has yet to do so.”

“Can you imagine if the shoe was on the other foot, and instead of HUD creating this problem, confusion, delay, and improper foreclosures for individual Americans (possibly to delay or reduce their own losses?), it had been the private sector mortgage lenders who had caused it? I would bet there would be front page articles in every major newspaper, major civil lawsuits, and even calls by some for criminal prosecutions. As I have said several times on this blog: ”The standard for the private, for-profit sector is so much higher than for anyone or any institution in government.” That doesn’t seem right to me, does it to you? With no need to make a profit or compete with anyone and its long, institutional tenure, it would only make sense that our government institutions would have their “act together”, far better than the much more volatile private sector (where companies are succeeding and failing all the time). And yet, we all know that when it comes to our government and its institutions, there isn’t a lot that seems to make sense these days.”, Mike Perry, former Chairman and CEO, IndyMac Bank

Excerpt from May 28, 2014 Mortgage Industry Newsletter:

“Reverse mortgages sometimes are the topic du jour; some banks consider them a viable product, while others consider them more of a headache than anything (liability is too strong a word). I can see both sides of the argument. Nearly a month ago Senator Schumer and Senator Boxer sent a letter to HUD Secretary Donovan informing him that reverse mortgage companies are threatening heirs with foreclosure instead of following HUD’s rules and allowing them to satisfy the loan at 95% of current appraised value. Buckley Sandler writes, “The Senators’ letter asks HUD to: (i) issue a mortgagee letter making clear that a matured reverse mortgage loan can be extinguished by the mortgagor, the mortgagor’s estate, or personal representative by paying 95% of the home’s market value; (ii) develop a letter that servicers can send to a borrower’s family members and heirs that outlines options for satisfying the loan; and (iii) enforce existing rules and require that any servicer that fails to offer this option within the required time allow a family member or heir to pay the lower of 95% of the home’s value at the time the loan became due or 95% of the home’s value at the time the error was corrected.” The confusion here may lie with HUD itself, as it appears to stem from a mortgagee letter HUD issued in 2008 that would have limited lenders’ ability to accept less than the full mortgage balance as payment from family members or heirs. HUD rescinded that letter in 2011 and stated at the time that it would issue a replacement letter, but has yet to do so.”

Posted on May 28, 2014, in Postings. Bookmark the permalink. Leave a comment.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: