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78 rows where part_number = 206 and title_number = 24 sorted by section_id
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| section_id ▼ | title_number | title_name | chapter | subchapter | part_number | part_name | subpart | subpart_name | section_number | section_heading | agency | authority | source_citation | amendment_citations | full_text |
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| 24:24:2.1.1.2.6.1.133.1 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | A | Subpart A—General | § 206.1 Purpose. | HUD | The purposes of the Home Equity Conversion Mortgage (HECM) Insurance program are set out in section 255(a) of the National Housing Act, Public Law 73-479, 48 Stat. 1246 (12 U.S.C. 1715z-20) (“NHA”). | ||||
| 24:24:2.1.1.2.6.1.133.2 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | A | Subpart A—General | § 206.3 Definitions. | HUD | [82 FR 7117, Jan. 19, 2017, as amended at 88 FR 12828, Mar. 1, 2023] | As used in this part, the following terms shall have the meaning indicated. Bona fide tenant means a tenant of the property who is not a mortgagor, borrower, a spouse or child of a mortgagor or borrower, or any other member of a mortgagor's or borrower's family. Borrower means a mortgagor who is an original borrower under the HECM Loan Agreement and Note. The term does not include successors or assigns of a borrower. Borrower's Advance means the funds advanced to the borrower at the closing of a fixed interest rate HECM in accordance with § 206.25. CMT Index means the U.S. Constant Maturity Treasury Index. Commissioner means the Federal Housing Commissioner or the Commissioner's authorized representative. Contract of insurance means the agreement evidenced by the issuance of a Mortgage Insurance Certificate or by the endorsement of the Commissioner upon the credit instrument given in connection with an insured mortgage, incorporating by reference the regulations in subpart C of this part and the applicable provisions of the National Housing Act. Day means calendar day, except where the term business day is used. Deferral Period means the period of time following the death of the last surviving borrower during which the due and payable status of a HECM is deferred for an Eligible Non-Borrowing Spouse provided that the Qualifying Attributes and all other FHA requirements continue to be satisfied. Eligible Non-Borrowing Spouse means a Non-Borrowing Spouse who meets all Qualifying Attributes for a Deferral Period. Estate planning service firm means an individual or entity that is not a mortgagee approved under part 202 of this chapter or a participating agency approved under subpart B of 24 CFR part 214 and that charges a fee that is: (1) Contingent on the prospective borrower obtaining a mortgage loan under this part, except the origination fee authorized by § 206.31 or a fee specifically authorized by the Commissioner; or (2) For information that borrowers and Eligible and Ineligible Non-Bor… | |||
| 24:24:2.1.1.2.6.1.133.3 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | A | Subpart A—General | § 206.7 Effect of amendments. | HUD | The regulations in this part may be amended by the Commissioner at any time and from time to time, in whole or in part, but amendments to subparts B and C of this part will not adversely affect the interests of a mortgagee on any mortgage to be insured for which either the Direct Endorsement mortgagee or Lender Insurance mortgagee has approved the borrower and all terms and conditions of the mortgage, or the Commissioner has made a commitment to insure. Such amendments will not adversely affect the interests of a borrower in the case of a default by a mortgagee where the Commissioner makes payments to the borrower. | ||||
| 24:24:2.1.1.2.6.1.133.4 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | A | Subpart A—General | § 206.8 Preemption. | HUD | (a) Lien priority. The full amount secured by the mortgage shall have the same priority over any other liens on the property as if the full amount had been disbursed on the date the initial disbursement was made, regardless of the actual date of any disbursement. The amount secured by the mortgage shall include all direct payments by the mortgagee to the borrower and all other loan advances permitted by the mortgage for any purpose, including loan advances for interest, property charges, mortgage insurance premiums, required repairs, servicing charges, counseling charges, and costs of collection, regardless of when the payments or loan advances were made. The priority provided by this section shall apply notwithstanding any State constitution, law, or regulation. (b) Second mortgage. If the Commissioner holds a second mortgage, it shall have a priority subordinate only to the first mortgage (and any senior liens permitted by paragraph (a) of this section). | ||||
| 24:24:2.1.1.2.6.2.133.1 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.9 Eligible mortgagees. | HUD | (a) Statutory requirements. See sections (b)(2), (c), and 255(d)(1) of the NHA. (b) HUD approved mortgagees. Any mortgagee authorized under paragraph (a) of this section and approved under part 202 of this chapter, except an investing mortgagee approved under § 202.9 of this chapter, is eligible to apply for insurance. A mortgagee approved under §§ 202.6, 202.7, 202.9 or 202.10 of this chapter may purchase, hold and sell mortgages insured under this part without additional approval. | ||||
| 24:24:2.1.1.2.6.2.133.10 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.27 Mortgage provisions. | HUD | (a) Form. The mortgage shall be in a form meeting the requirements of the Commissioner. (b) Provisions. The terms of the mortgage shall contain an explanation of how payments will be made to the borrower, how interest will be charged, and when the mortgage will be due and payable. The mortgage shall include a provision deferring the due and payable status that occurs because of the death of the last surviving borrower for an Eligible Non-Borrowing Spouse. It shall also contain provisions designed to ensure compliance with this part and provisions on the following additional matters: (1) Disbursements by the mortgagee under the term or tenure payment options shall be mailed to the borrower or electronically transferred to an account of the borrower on the first business day of each month beginning with the first month after closing. Disbursements under the line of credit payment option shall be mailed to the borrower or electronically transferred to an account of the borrower within five business days after the mortgagee has received a written request for disbursement by the borrower. In accordance with § 206.55, in no event may disbursements continue during a Deferral Period. (2) The borrower shall insure all improvements on the property that serves as collateral for the HECM whether in existence at the time of origination or subsequently erected, against any hazards, casualties, and contingencies, including but not limited to fire and flood, for which the mortgagee requires insurance. Such insurance shall be maintained in the amount and for the period of time that is necessary to protect the mortgagee's investment. Whether or not the mortgagee imposes a flood insurance requirement, the borrower shall at a minimum insure all improvements on the property, whether in existence at the time of origination or subsequently erected, against loss by floods to the extent required by the Commissioner. If the mortgagee imposes insurance requirements, all insurance shall be carried with companies acceptable to the mor… | ||||
| 24:24:2.1.1.2.6.2.133.11 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.31 Allowable charges and fees. | HUD | (a) Fees at closing. The mortgagee may collect, either in cash at the time of closing or through an initial payment under the mortgage, the following charges and fees incurred in connection with the origination, processing, and closing of the mortgage loan: (1) Loan Origination Fee. Mortgagees may charge a loan origination fee and may use such fee to pay for services performed by a sponsored third-party originator. The loan origination fee limit shall be the greater of $2,500 or two percent of the maximum claim amount of $200,000, plus one percent of any portion of the maximum claim amount that is greater than $200,000. Mortgagees may accept a lower origination fee. Mortgagees may pay fees for services performed by a sponsored third-party originator and these fees may be included as part of the loan origination fee. The total amount of the loan origination fee may not exceed $6,000, except that the Commissioner may through notice adjust the maximum limit in accordance with the annual percentage increase in the Consumer Price Index of the Bureau of Labor Statistics of the Department of Labor in increments of $500 only when the percentage increase in such index, when applied to the maximum origination fee, produces dollar increases that exceed $500. The loan origination fee may be fully financed with the mortgage. (2) Reasonable and customary amounts. Reasonable and customary amounts, but not more than the amount actually paid by the mortgagee, for any of the following items: (i) Recording fees and recording taxes, or other charges incident to the recordation of the insured mortgage; (ii) Credit report; (iii) Survey, if required by the mortgagee or the borrower; (iv) Title examination; (v) Mortgagee's title insurance; (vi) Fees paid to an appraiser for the initial appraisal of the property; (vii) Flood certifications; and (viii) Such other charges as may be authorized by the Commissioner. (b) Repair administration fee. If the property requires repairs after closing in order to meet FHA requiremen… | ||||
| 24:24:2.1.1.2.6.2.133.12 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.32 No outstanding unpaid obligations. | HUD | In order for a mortgage to be eligible under this part, a borrower must establish to the satisfaction of the mortgagee that after the initial payment of loan proceeds under § 206.25(a), there will be no outstanding or unpaid obligations incurred by the borrower in connection with the mortgage transaction, except for mortgage servicing charges permitted under § 206.207(b) and any future Repair Set Aside established pursuant to § 206.19(f)(1); and the initial disbursement will not be used for any payment to or on behalf of an estate planning service firm. | ||||
| 24:24:2.1.1.2.6.2.133.2 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.13 Disclosure of available HECM program options. | HUD | At the time of initial contact, the mortgagee shall inform the prospective HECM borrower, in a manner acceptable to the Commissioner, of all products, features, and options of the HECM program that FHA will insure under this part, including: fixed interest rate mortgages with the Single Lump Sum payment option; adjustable interest rate mortgages with tenure, term, and line of credit disbursement options, or a combination of these; any other FHA insurable disbursement options; and initial mortgage insurance premium options, and how those affect the availability of other mortgage and disbursement options. | ||||
| 24:24:2.1.1.2.6.2.133.3 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.15 Insurance. | HUD | Mortgages originated under this part must be endorsed through the Direct Endorsement program under § 203.5 of this chapter, except that any references to § 203.255 in § 203.5 shall mean § 206.115. The mortgagee shall submit the information as described in § 206.115(b) for the Direct Endorsement program; the certificate of housing counseling as described in § 206.41; a copy of the title insurance commitment satisfactory to the Commissioner (or other acceptable title evidence if the Commissioner has determined not to require title insurance under § 206.45(a)); the mortgagee's election of either the assignment or shared premium option under § 206.107; and any other documentation required by the Commissioner. If the mortgagee has complied with the requirements of §§ 203.3 and 203.5, except that any reference to § 203.255 in these sections shall mean § 206.115 for purposes of this section, and other requirements of this part, and the mortgage is determined to be eligible, the Commissioner will endorse the mortgage for insurance by issuing a Mortgage Insurance Certificate. | ||||
| 24:24:2.1.1.2.6.2.133.4 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.17 Eligible mortgages: general. | HUD | (a) [Reserved] (b) Interest rate and payment options. A HECM shall provide for either fixed or adjustable interest rates in accordance with § 206.21. (1) Fixed interest rate mortgages shall use the Single Lump Sum payment option (§ 206.19(e)). (2) Adjustable interest rate mortgages shall initially provide for the term (§ 206.19(a)), the tenure (§ 206.19(b)), the line of credit (§ 206.19(c)), or a modified term or modified tenure (§ 206.19(d)) payment option, subject to a later change in accordance with § 206.26. (c) Shared appreciation. A mortgage may provide for shared appreciation in accordance with § 206.23. | ||||
| 24:24:2.1.1.2.6.2.133.5 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.19 Payment options. | HUD | (a) Term payment option. Under the term payment option, equal monthly payments are made by the mortgagee to the borrower for a fixed term of months chosen by the borrower in accordance with this section and § 206.25(e), unless the mortgage is prepaid in full or becomes due and payable earlier under § 206.27(c). (b) Tenure payment option. Under the tenure payment option, equal monthly payments are made by the mortgagee to the borrower in accordance with this section and with § 206.25(f), unless the mortgage is prepaid in full or becomes due and payable under § 206.27(c). (c) Line of credit payment option. Under the line of credit payment option, payments are made by the mortgagee to the borrower at times and in amounts determined by the borrower as long as the amounts do not exceed the payment amounts permitted by § 206.25. (d) Modified term or modified tenure payment option. Under the modified term or modified tenure payment options, equal monthly payments are made by the mortgagee and the mortgagee shall set aside a portion of the principal limit to be drawn down as a line of credit as long as the amounts do not exceed the payment amounts permitted by § 206.25. (e) Single Lump Sum payment option. Under the Single Lump Sum payment option, the Borrower's Advance will be made by the mortgagee to the borrower in an amount that does not exceed the payment amount permitted in § 206.25. The Single Lump Sum payment option will be available only for fixed interest rate HECMs. Set asides requiring disbursements after close may be offered in accordance with paragraphs (f)(1) through (3) of this section. (f) Principal limit set asides —(1) Repair Set Aside. When repairs required by § 206.47 will be completed after closing, the mortgagee shall set aside a portion of the principal limit equal to 150 percent of the Commissioner's estimated cost of repairs, plus the repair administration fee. (2) Property Charge Set Aside —(i) Life Expectancy Set Aside (LESA). When required by § 206.205(b)(1) or selected b… | ||||
| 24:24:2.1.1.2.6.2.133.6 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.21 Interest rate. | HUD | [82 FR 7117, Jan. 19, 2017, as amended at 88 FR 12828, Mar. 1, 2023] | (a) Fixed interest rate. A fixed interest rate is agreed upon by the borrower and mortgagee. (b) Adjustable interest rate. An initial expected average mortgage interest rate, which defines the mortgagee's margin, is agreed upon by the borrower and mortgagee as of the date of loan closing, or as of the date of rate lock-in, if the expected average mortgage interest rate was locked in prior to closing. The interest rate shall be adjusted in one of two ways depending on the option selected by the borrower, in accordance with paragraphs (b)(1) and (b)(2) of this section. Whenever an interest rate is adjusted, the new interest rate applies to the entire loan balance. The difference between the initial interest rate and the index figure applicable when the firm commitment is issued shall equal the margin used to determine interest rate adjustments. If the expected average mortgage interest rate is locked in prior to closing, the difference between the expected average mortgage interest rate and the value of the appropriate index at the time of rate lock-in shall equal the margin used to determine interest rate adjustments. (1) Annual adjustable interest rate HECMs. A mortgagee offering an annual adjustable interest rate shall offer a mortgage with an interest rate cap structure that limits the periodic interest rate increases and decreases as follows: (i) Types of mortgages insurable. The types of adjustable interest rate mortgages that are insurable are those for which the interest rate may be adjusted annually by the mortgagee, beginning after one year from the date of the closing. (ii) Interest rate index. Changes in the mortgage interest rate charged on an adjustable interest rate mortgage must correspond to changes in the weekly average yield on U.S. Treasury securities (CMT) adjusted to a constant maturity of one year; to the 30-day average Secured Overnight Financing Rate (SOFR); or to an alternative SOFR tenor approved by the Secretary. The Secretary may publish approved SOFR tenors as alternative… | |||
| 24:24:2.1.1.2.6.2.133.7 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.23 Shared appreciation. | HUD | (a) Additional interest based on net appreciated value. Any mortgage for which the mortgagee has chosen the shared premium option (§ 206.107) may provide for shared appreciation. At the time the mortgage becomes due and payable or is paid in full, whichever occurs first, the borrower shall pay an additional amount of interest equal to a percentage of any net appreciated value of the property during the life of the mortgage. The percentage of net appreciated value to be paid to the mortgagee, referred to as the appreciation margin, shall be no more than twenty-five percent, subject to an effective interest rate cap of no more than twenty percent. (b) Computation of mortgagee share. The mortgagee's share of net appreciated value is computed as follows: (1) If the outstanding loan balance at the time the mortgagee's share of net appreciated value becomes payable is less than the appraised value of the property at the time of loan origination, the mortgagee's share is calculated by subtracting the appraised value at the time of loan origination from the adjusted sales proceeds ( i.e., sales proceeds less transfer costs and capital improvement costs incurred by the borrower, but excluding any liens) and multiplying by the appreciation margin. (2) If the outstanding loan balance is greater than the appraised value at the time of loan origination but less than the adjusted proceeds, the mortgagee's share is calculated by subtracting the outstanding loan balance from the adjusted sales proceeds and multiplying by the appreciation margin. (3) If the outstanding loan balance is greater than the adjusted sales proceeds, the net appreciated value is zero. (4) If there has been no sale or transfer involving satisfaction of the mortgage at the time the mortgagee's share of net appreciated value becomes payable, sales proceeds for purposes of this section shall be the appraised value as determined in accordance with procedures approved by the Commissioner. (c) Effective interest rate. To determine the effective i… | ||||
| 24:24:2.1.1.2.6.2.133.8 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.25 Calculation of disbursements. | HUD | (a) Initial disbursements —(1) Initial Disbursement Limit—Adjustable Interest Rate HECMs: for term, tenure, line of credit, modified term, and modified tenure payment options: (i) The mortgagee is responsible for determining the maximum Initial Disbursement Limit. (ii) The maximum disbursement allowed at closing and during the First 12-Month Disbursement Period is the lesser of: (A) The greater of an amount established by the Commissioner through notice which shall not be less than 50 percent of the principal limit; or the sum of Mandatory Obligations and a percentage of the principal limit established by the Commissioner through notice which shall not be less than 10 percent; or (B) The principal limit less the sum of the funds in the LESA for payment beyond the First 12-Month Disbursement Period and the Servicing Fee Set Aside. (iii) The amount in the First 12-Month Disbursement Period or at any point in time may not exceed the principal limit. (iv) Mortgagees shall monitor and track all disbursements that occur at loan closing and during the First 12-Month Disbursement Period; the total amount of disbursements shall not exceed the maximum Initial Disbursement Limit. (v) The borrower shall notify the mortgagee at loan closing of the amount of the additional percentage of the principal limit beyond Mandatory Obligations that the borrower will draw or that will remain available to be drawn during the First 12-Month Disbursement Period. The borrower may not increase or decrease this election after closing. (2) Borrower's Advance—Fixed Interest Rate HECMs: for the Single Lump Sum payment option: (i) The mortgagee is responsible for determining the maximum Borrower's Advance. (ii) The disbursement shall only be taken at the time of closing and the maximum disbursement shall not exceed the lesser of: (A) The greater of an amount established by the Commissioner through notice which shall not be less than 50 percent of the principal limit; or the sum of Mandatory Obligations and a percentage of the prin… | ||||
| 24:24:2.1.1.2.6.2.133.9 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.26 Change in payment option. | HUD | (a) General. The payment option may be changed as provided in this section. (b) Borrower request for payment plan change —(1) Adjustable Interest Rate HECMs. (i) During the First 12-Month Disbursement Period, no payment plan change shall cause disbursements to exceed the Initial Disbursement Limit. (ii) After the First 12-Month Disbursement Period, as long as the outstanding loan balance is less than the principal limit, a borrower may request a recalculation of the current payment option, a change from any payment option to another available payment option or a disbursement of any amount (not to exceed the difference between the principal limit and the sum of the outstanding loan balance and any set asides for repairs, servicing charges or property charges). A mortgage will continue to bear interest at an adjustable interest rate as agreed between the mortgagee and the borrower at loan origination. The mortgagee shall recalculate any future monthly payments in accordance with § 206.25. (iii) Fee for change in payment. The mortgagee may charge a fee, not to exceed an amount determined by the Commissioner, whenever there is a payment plan change or whenever payments are recalculated. (iv) Limitations. The Commissioner may, through notice, establish limitations on the frequency of payment plan changes, a minimum notice period that a borrower must provide in order to make a request under paragraph (b)(1)(ii) of this section, or other limitations on payment plan change requests by the borrower. (2) Fixed Interest Rate HECMs. Borrowers may not request a change in payment option. (c) Change due to initial repairs. When initial repairs after closing under § 206.47 are required using a Repair Set Aside, mortgagees shall comply with the following: (1) Adjustable Interest Rate HECMs. (i) If repairs after closing under § 206.47 are completed without using all of the funds set aside for repairs, the mortgagee shall transfer the remaining amount to a line of credit, modified term, or modified tenure paym… | ||||
| 24:24:2.1.1.2.6.2.134.13 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.33 Age of borrower. | HUD | The youngest borrower shall be 62 years of age or older at the time of loan closing. | ||||
| 24:24:2.1.1.2.6.2.134.14 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.34 Limitation on number of mortgages. | HUD | (a) Once a borrower has obtained an insured mortgage under this part, the borrower is eligible to obtain future insured HECM loan financing if the existing HECM is satisfied prior to or at the closing of the new HECM, or the borrower provides legal documentation, in a manner acceptable to the Commissioner, evidencing release of the borrower's financial obligation to satisfy the existing HECM. (b) Current HECM borrowers that plan to sell their existing residence and use the HECM for Purchase program to obtain a new principal residence must pay off the existing FHA-insured mortgage before the HECM for Purchase mortgage can be insured. | ||||
| 24:24:2.1.1.2.6.2.134.15 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.35 Title of property which is security for HECM. | HUD | (a) A mortgagor is not required to be a borrower; however, any borrower is required to be on title to the property which serves as collateral for the HECM, and is therefore, by definition, also a mortgagor. (b) The mortgagor shall hold title to the entire property which is the security for the mortgage. If there are multiple mortgagors, all the mortgagors must collectively hold title to the entire property which is the security for the mortgage. If one or more mortgagors hold a life estate in the property, for purposes of this section only, the term “mortgagor” shall include each holder of a future interest in the property (remainder or reversion) who has executed the mortgage. (c) If Non-Borrowing Spouses and non-borrowing owners of the property will continue to hold title to the property which serves as collateral for the HECM, such Non-Borrowing Spouses and non-borrowing owners must sign the mortgage as mortgagors, evidencing their commitment of the property as security for the mortgage. (d) All Non-Borrowing Spouses and non-borrowing owners shall sign a certification that: (1) Consents to their spouse or other borrowing owner obtaining the HECM; (2) Acknowledges the terms and conditions of the mortgage; and (3) Acknowledges that the property will serve as collateral for the HECM as evidenced by mortgage lien(s). | ||||
| 24:24:2.1.1.2.6.2.134.16 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.36 Seasoning requirements for existing non-HECM liens. | HUD | (a) The Commissioner may establish, through notice, seasoning requirements for existing non-HECM liens. Such seasoning requirements shall not prohibit the payoff of existing non-HECM liens using HECM proceeds if the liens have been in place for longer than 12 months prior to the HECM closing or if the liens have resulted in cash to the borrower in an amount of $500 or less, whether at closing or through cumulative draws prior to the date of the HECM closing. (b) Mortgagees must provide documentation satisfactory to the Commissioner as established by notice that the seasoning requirement was met. (c) Home Equity Lines of Credit. The borrower may pay off, at closing, a Home Equity Line of Credit (HELOC) that does not meet seasoning requirements from borrower funds, the HECM funds, or a combination of HECM funds and borrower funds, as long as the draw from HECM funds does not exceed the percentage approved by the Commissioner under the authority of § 206.25(a). | ||||
| 24:24:2.1.1.2.6.2.134.17 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.37 Credit standing. | HUD | (a) Each borrower shall have a general credit standing satisfactory to the Commissioner. (b) Required Financial Assessment —(1) Requirement for Financial Assessment prior to loan approval. Prior to loan approval, the mortgagee shall assess the financial capacity of the borrower to comply with the terms of the mortgage and evaluate whether the HECM is a sustainable solution for the borrower, in accordance with instructions established by the Commissioner through notice. The Financial Assessment shall consider the borrower's credit history, cash flow and residual income, extenuating circumstances, and compensating factors. (i) Credit history. In accordance with FHA guidelines in existence at the time of FHA Case Number assignment, mortgagees shall conduct an in-depth credit history analysis to determine if the borrower has demonstrated the willingness to meet his or her financial obligations. (ii) Cash flow and residual income analysis. In accordance with FHA guidelines in existence at the time of FHA Case Number assignment, mortgagees shall conduct a cash flow and residual income analysis to determine the capacity of the borrower to meet his or her documented financial obligations with his or her documented income. (iii) Extenuating circumstances. Where the borrower's credit history does not meet the criteria set by the mortgagee based on FHA guidelines in existence at the time of FHA Case Number assignment, mortgagees shall consider and document, as part of the Financial Assessment, extenuating circumstances that led to the credit issues. (iv) Compensating factors. The mortgagee shall document and identify in the Financial Assessment any considered compensating factors. (2) Completion and approval of Financial Assessment. The Financial Assessment shall be completed and approved by a DE Underwriter registered in HUD's system of record by the underwriting mortgagee. (3) Nondiscrimination. (i) The Financial Assessment shall be conducted in a uniform manner that shall not discriminate because of… | ||||
| 24:24:2.1.1.2.6.2.134.18 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.39 Principal residence. | HUD | (a) The property must be the principal residence of each borrower, and if applicable, Eligible Non-Borrowing Spouse, at closing. (b) HECM for Purchase. For HECM for Purchase transactions, each borrower, and if applicable, Eligible Non-Borrowing Spouse, must occupy the property within 60 days from the date of closing. | ||||
| 24:24:2.1.1.2.6.2.134.19 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.40 Disclosure, verification and certifications. | HUD | (a) Disclosure and certification of Social Security and Employer Identification Numbers —(1) Borrower. The borrower must meet the requirements for the disclosure and verification of Social Security and Employer Identification Numbers, as provided by part 200, subpart U, of this chapter. (2) Eligible Non-Borrowing Spouse. The Eligible Non-Borrowing Spouse shall comply with the requirements for disclosure and verification of Social Security and Employer Identification Numbers by borrowers in paragraph (a)(1) of this section. (b) Certifications. Each borrower and each Non-Borrowing Spouse shall provide all required certifications to HUD and the mortgagee, as required by the Commissioner. (c) Designation of alternate individual. At the time of origination, the mortgagee shall request that the borrower designate an alternate individual for the purpose of communicating with the mortgagee if the mortgagee has not been able to reach the borrower. The designation of the alternate individual is at the discretion of the borrower. If the mortgagee is unable to make contact or communicate with the borrower for any reason, including death or incapacitation, the mortgagee shall communicate with the alternate individual, if one has been designated by the borrower. | ||||
| 24:24:2.1.1.2.6.2.134.20 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.41 Counseling. | HUD | (a) List provided. At the time of the initial contact with the prospective borrower, the mortgagee shall give the borrower a list of the names, addresses, and telephone numbers of HECM counselors and their employing agencies, which have been approved by the Commissioner, in accordance with subpart E of this part, as qualified and able to provide the information described in paragraph (b) of this section. The borrower, any Eligible or Ineligible Non-Borrowing Spouse, and any non-borrowing owner must receive counseling. (b) Information to be provided. (1) A HECM counselor must discuss with the borrower: (i) The information required by section 255(f) of the NHA; (ii) Whether the borrower has signed a contract or agreement with an estate planning service firm that requires, or purports to require, the borrower to pay a fee on or after closing that may exceed amounts permitted by the Commissioner or this part; (iii) If such a contract has been signed under paragraph (b)(1)(ii) of this section, the extent to which services under the contract may not be needed or may be available at nominal or no cost from other sources, including the mortgagee; and (iv) Any other requirements determined by the Commissioner. (2) If the HECM borrower has an Eligible Non-Borrowing Spouse, in addition to meeting the requirements of paragraph (b)(1) of this section, a HECM counselor shall discuss with the borrower and Eligible Non-Borrowing Spouse: (i) The requirement that the Eligible Non-Borrowing Spouse must obtain ownership of the property or other legal right to remain in the property for life, upon the death of the last surviving borrower; (ii) A failure to obtain ownership or other legal right to remain in the property for life will result in the HECM becoming due and payable and the Eligible Non-Borrowing Spouse will not receive the benefit of the Deferral Period; (iii) The requirement that the property must be the principal residence of the Eligible Non-Borrowing Spouse prior to and after the death of the borrowing spo… | ||||
| 24:24:2.1.1.2.6.2.134.21 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.43 Information to borrower. | HUD | (a) Disclosure of costs of obtaining mortgage. The mortgagee shall ensure that the borrower has received full disclosure of all costs of obtaining the mortgage. The mortgagee shall ask the borrower about any costs or other obligations that the borrower has incurred to obtain the mortgage, as defined by the Commissioner, in addition to providing any disclosures required by law. The mortgagee shall clearly state to the borrower which charges are required to obtain the mortgage and which are not required to obtain the mortgage. (b) Lump sum disbursement. (1) If the borrower requests that at least 25 percent of the principal limit amount (after deducting amounts excluded in the following sentence) be disbursed at closing to the borrower (or as otherwise permitted by § 206.25), the mortgagee must make sufficient inquiry at closing to confirm that the borrower will not use any part of the amount disbursed for payments to or on behalf of an estate planning service firm, with an explanation of § 206.32 as necessary or appropriate. (2) This paragraph does not apply to any part of the principal limit used for the following: (i) Initial MIP under § 206.105(a) or fees and charges allowed under § 206.31(a) paid by the mortgagee from mortgage proceeds instead of by the borrower in cash; and (ii) Amounts set aside in accordance with § 206.19(f) for repairs under § 206.47, for property charges under § 206.205, or for servicing charges under § 206.207(b). | ||||
| 24:24:2.1.1.2.6.2.134.22 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.44 Monetary investment for HECM for Purchase program. | HUD | (a) Monetary investment. At closing, HECM for Purchase borrowers shall provide a monetary investment that will be applied to satisfy the difference between the principal limit and the sale price for the property, plus any HECM loan-related fees that are not financed into the loan, minus the amount of the earnest deposit. (b) Funding sources. To satisfy the required monetary investment, borrowers may use: (1) Cash on hand; (2) Cash from the sale or liquidation of the borrower's assets; (3) HECM mortgage proceeds; or (4) Other approved funding sources as determined by the Commissioner through notice. (c) Interested party contributions. (1) The following interested party contributions are permissible: (i) Fees required to be paid by a seller under state or local law; (ii) Fees customarily paid by a seller in the subject property locality; and (iii) The purchase of the Home Warranty policy by the seller. (2) The Commissioner may define additional permissible interested party contributions and impose requirements for permissible interested party contributions through a notice in the Federal Register . | ||||
| 24:24:2.1.1.2.6.2.135.23 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.45 Eligible properties. | HUD | [82 FR 7117, Jan. 19, 2017, as amended at 87 FR 70743, Nov. 21, 2022] | (a) Title. A mortgage must be on real estate held in fee simple; or on a leasehold that is under a lease with a duration lasting until the later of: 99 years, if such lease is renewable; or the actuarial life expectancy of the mortgagor plus a number of years specified by the Commissioner, which shall not be more than 99 years. The mortgagee shall obtain a title insurance policy satisfactory to the Commissioner. If the Commissioner determines that title insurance for reverse mortgages is not available for reasonable rates in a state, then the Commissioner may specify other acceptable forms of title evidence in lieu of title insurance. (b) Type of property. The property shall include a dwelling designed principally as a residence for one family or such additional families as the Commissioner shall determine. A condominium unit designed for one-family occupancy shall also be an eligible property. (c) Borrower and mortgagee requirement for maintaining flood insurance coverage —(1) In general. (i) The requirements of this paragraph (c) apply if a mortgage is to cover property improvements that: (A) Are located in an area designated by the Federal Emergency Management Agency (FEMA) as a floodplain area having special flood hazards; (B) Are otherwise determined by the Commissioner to be subject to a flood hazard; or (C) Are not otherwise covered by the flood insurance standard for condominium projects established under 24 CFR 203.43b(d)(6)(iii) or (i)(1). (ii) No mortgage may be insured that covers property improvements located in an area that has been identified by FEMA as an area having special flood hazards, unless the community in which the area is situated is participating in the National Flood Insurance Program (NFIP) and flood insurance is obtained by the borrower. Such flood insurance shall be in the form of the standard policy issued under the NFIP or private flood insurance as defined in paragraph (c)(6) of this section. Such requirement for flood insurance shall be effective one year after the d… | |||
| 24:24:2.1.1.2.6.2.135.24 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.47 Property standards; repair work. | HUD | (a) Need for repairs. Properties must meet the applicable property requirements of the Commissioner in order to be eligible. Properties that do not meet the property requirements must be repaired in order to ensure that the repaired property will serve as adequate security for the insured mortgage. (b) Assurance that repairs are made. The mortgage may be closed before the repair work is completed if the Commissioner estimates that the cost of the remaining repair work will not exceed 15 percent of the maximum claim amount and the mortgage contains provisions approved by the Commissioner concerning payment for the repairs. (c) Reimbursement to contractor. When repair work is completed after closing by a contractor, the mortgagee shall cause one or more inspections of the property to be made by an inspector or other qualified individual acceptable to the Commissioner in order to ensure that the repair work is satisfactory, and prior to the release of funds from the Repair Set Aside. The mortgagee shall hold back a portion of the contract price attributable to the work done before each interim release of funds, and the total of the hold backs will be released after the final inspection and approval of the release by the mortgagee. The mortgagee shall ensure that all mechanics' and materialmen's liens are released of record. (d) Reimbursement to borrower. The mortgagee shall not reimburse the borrower for any labor the borrower performed. The mortgagee may reimburse the borrower for the actual cost of repair materials from the Repair Set Aside, provided that the mortgagee causes one or more inspections of the property by an inspector or other qualified individual acceptable to the Commissioner and meets all reimbursement requirements established by the Commissioner. (e) HECM for Purchase. For HECM for Purchase transactions, where major property deficiencies threaten the health and safety of the homeowner or jeopardize the soundness and security of the property, all repairs must be completed by the selle… | ||||
| 24:24:2.1.1.2.6.2.135.25 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.51 Eligibility of mortgages involving a dwelling unit in a condominium. | HUD | [84 FR 41877, Aug. 15, 2019] | If the mortgage involves a dwelling unit in a condominium, the project in which the unit is located must be acceptable to the Commissioner as set forth in 24 CFR 203.43b. | |||
| 24:24:2.1.1.2.6.2.135.26 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.52 Eligible sale of property-HECM for Purchase | HUD | (a) Sale by owner of record —(1) Owner of record requirement. To be eligible for a mortgage insured by FHA, the property must be purchased from the owner of record and the transaction may not involve any sale or assignment of the sales contract. (2) Supporting documentation. The mortgagee shall obtain documentation verifying that the seller is the owner of record and must submit this documentation to FHA as part of the application for mortgage insurance, in accordance with §§ 206.15 and 206.115(b)(9). (b) Time restrictions on re-sales —(1) General. The eligibility of a property for a mortgage insured by FHA is dependent on the time that has elapsed between the date the seller acquired the property (based upon the date of settlement) and the date of execution of the sales contract that will result in the FHA mortgage insurance (the re-sale date). The mortgagee shall obtain documentation verifying compliance with the time restrictions described in this paragraph and must submit this documentation to FHA as part of the application for mortgage insurance, in accordance with § 206.115(b). (2) Re-sales occurring 90 days or less following acquisition. If the re-sale date is 90 days or less following the date of acquisition by the seller, the property is not eligible for a mortgage to be insured by FHA. (3) Re-sales occurring between 91 days and 180 days following acquisition. (i) If the re-sale date is between 91 days and 180 days following acquisition by the seller, the property is generally eligible for a mortgage insured by FHA. (ii) However, FHA will require that the mortgagee obtain additional documentation if the re-sale price is 100 percent over the purchase price. Such documentation must include an appraisal from another appraiser. The mortgagee may also document its loan file to support the increased value by establishing that the increased value results from the rehabilitation of the property. (iii) FHA may revise the level at which additional documentation is required under paragraph (b)(3) … | ||||
| 24:24:2.1.1.2.6.2.136.27 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.53 Refinancing a HECM loan. | HUD | (a) General. Except as otherwise provided in this section, all requirements applicable to the insurance of HECMs under this part apply to the insurance of refinanced HECMs. FHA may, upon application by a mortgagee, insure any mortgage given to refinance an existing HECM insured under this part, including loans assigned to the Commissioner as described in § 206.107(a)(1) and § 206.121(b). (b) Definition of “total cost of the refinancing”. For purposes of paragraphs (d) and (e) of this section, the term “total cost of the refinancing” means the sum of the allowable charges and fees permitted under § 206.31 and the initial MIP described in § 206.105(a) and paragraph (c) of this section. (c) Initial MIP limit. (1) The initial MIP paid by the mortgagee pursuant to § 206.105(a) shall not exceed the difference between: three percent of the increase in the maximum claim amount for the new HECM, minus the amount of the initial MIP already charged and paid by the borrower for the existing HECM that is being refinanced. No refunds will be given if the initial MIP paid on the existing HECM exceeds the initial MIP due on the new HECM. (2) The HECM refinance authority is only applicable when the property that serves as collateral for the FHA-insured mortgage remains the same. (3) Existing HECM borrowers refinancing an existing HECM are eligible for a MIP reduction under the conditions of this section, but existing HECM borrowers who participate in a HECM for Purchase transaction are ineligible for a reduction in the initial MIP. (d) Anti-churning disclosure —(1) Contents of anti-churning disclosure. In addition to providing the required disclosures under § 206.43, the mortgagee shall provide to the borrower its best estimate of: (i) The total cost of the refinancing to the borrower; and (ii) The increase in the borrower's principal limit as measured by the estimated initial principal limit on the mortgage to be insured less the current principal limit on the HECM that is being refinanced under this section. (2… | ||||
| 24:24:2.1.1.2.6.2.137.28 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.55 Deferral of due and payable status for Eligible Non-Borrowing Spouses. | HUD | (a) Deferral Period. If the last surviving borrower predeceases an Eligible Non-Borrowing Spouse, and if the requirements of paragraph (d) of this section are satisfied, the due and payable status will be deferred for as long as the Eligible Non-Borrowing Spouse continues to meet the Qualifying Attributes in paragraph (c) of this section and the requirements of paragraphs (d) and (e) of this section. (b) End of Deferral Period. (1) If a Deferral Period ceases or becomes unavailable because a Non-Borrowing Spouse no longer satisfies the Qualifying Attributes and has become an Ineligible Non-Borrowing Spouse, a mortgagee may not provide an opportunity to cure the default, and the HECM will become immediately due and payable as a result of the death of the last surviving borrower. (2) If a Deferral Period ceases but the Eligible Non-Borrowing Spouse continues to meet the Qualifying Attributes, the mortgagee must provide an Eligible Non-Borrowing Spouse with 30 days to cure the default, in accordance with § 206.57. (c) Qualifying Attributes. (1) In order to qualify as an Eligible Non-Borrowing Spouse, the Non-Borrowing Spouse must: (i) Have been the spouse of a HECM borrower at the time of loan closing and remained the spouse of such HECM borrower for the duration of the HECM borrower's lifetime; (ii) Have been properly disclosed to the mortgagee at origination and specifically named as an Eligible Non-Borrowing Spouse in the HECM mortgage and loan documents; (iii) Have occupied, and continue to occupy, the property securing the HECM as his or her principal residence; and (iv) Meet any other requirements as the Commissioner may prescribe by Federal Register notice for comment. (2) A Non-Borrowing Spouse who meets the Qualifying Attributes in paragraph (c)(1) of this section at origination is an Eligible Non-Borrowing Spouse and may not elect to be ineligible for the Deferral Period. A Non-Borrowing Spouse that is ineligible for the Deferral Period at the time of loan origination because he or she fail… | ||||
| 24:24:2.1.1.2.6.2.137.29 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.57 Cure provision enabling reinstatement of Deferral Period | HUD | (a) When the mortgagee is required by § 206.55(b)(2) to provide an Eligible Non-Borrowing Spouse with 30 days to cure the default, this section shall apply. (b) If the default is cured within the 30-day timeframe, the Deferral Period shall be reinstated, unless: (1) The mortgagee has reinstated the Deferral Period within the past two years immediately preceding the current notification to the Eligible Non-Borrowing Spouse that the mortgage is due and payable; (2) The reinstatement of the Deferral Period will preclude foreclosure if the mortgage becomes due and payable at a later date; or (3) The reinstatement of the Deferral Period will adversely affect the priority of the mortgage lien. (c) If the default is not cured within the 30-day timeframe, the mortgagee shall proceed in accordance with the established timeframes to initiate foreclosure and reasonable diligence in prosecuting foreclosure. (d) Even after a foreclosure proceeding has been initiated, the mortgagee shall permit an Eligible Non-Borrowing Spouse to cure the condition which resulted in the Deferral Period ceasing, consistent with § 206.55(b)(2), and to reinstate the mortgage and Deferral Period, and the mortgage insurance shall continue in effect. The mortgagee may require the Eligible Non-Borrowing Spouse to pay any costs that the mortgagee incurred to reinstate the mortgage, including foreclosure costs and reasonable attorney's fees. Such costs may not be added to the outstanding loan balance and shall be paid from some other source of funds. The mortgagee shall reinstate the Deferral Period unless: (1) The mortgagee has reinstated the Deferral Period within the past two years immediately preceding the latest notification to the Eligible Non-Borrowing Spouse that the mortgage is due and payable; (2) The reinstatement of the Deferral Period will preclude foreclosure if the mortgage becomes due and payable at a later date; or (3) The reinstatement of the Deferral Period will adversely affect the priority of the mortgage lien. | ||||
| 24:24:2.1.1.2.6.2.137.30 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.59 Obligations of mortgagee. | HUD | (a) Certifications and disclosures at closing. At closing, the mortgagee shall obtain the appropriate certification from each borrower identified as married as well as from each identified Non-Borrowing Spouse. When a HECM borrower has identified an Ineligible Non-Borrowing Spouse, the mortgagee shall also disclose the amount of mortgage proceeds that would have been available under the HECM if he or she were an Eligible Non-Borrowing Spouse. (b) Divorce. In the event of a divorce between the HECM borrower and Eligible Non-Borrowing Spouse, a mortgagee shall obtain a copy of the final divorce decree and shall not require the now Ineligible Non-Borrowing Spouse to fulfill any further requirements. (c) Death of borrower. Within 30 days of being notified of the death of the borrower, the mortgagee shall: (1) Obtain all certifications, as required by the Commissioner, from the Eligible Non-Borrowing Spouse, and continue to obtain the required certifications no less than annually thereafter for the duration of the Deferral Period; and (2) Notify any Eligible Non-Borrowing Spouse that the due and payable status of the loan is in a Deferral Period only for the amount of time that such Eligible Non-Borrowing Spouse continues to meet all requirements established by the Commissioner. (d) Non-compliance with requirements. If the Eligible Non-Borrowing Spouse ceases to meet any requirements established by the Commissioner, the mortgagee shall notify the Eligible Non-Borrowing Spouse within 30 days that the Deferral Period has ended and the HECM is immediately due and payable, unless the Deferral Period is reinstated in accordance with § 206.57. The mortgagee shall obtain documentation validating the reason for the cessation of the Deferral Period and, if applicable, the reason for reinstatement of the Deferral Period. | ||||
| 24:24:2.1.1.2.6.2.137.31 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | B | Subpart B—Eligibility; Endorsement | § 206.61 HECM proceeds during a Deferral Period. | HUD | (a) The HECM is not assumable. HECM proceeds may not be disbursed to any party during a Deferral Period, except as determined by the Commissioner through notice. (b) If a Repair Set Aside was established as a condition of the HECM, funds may be disbursed from the Repair Set Aside during a Deferral Period for the sole purpose of paying the cost of those repairs that were specifically identified prior to origination as necessary to the insurance of the HECM. Repairs under this paragraph shall only be paid for using funds from the Repair Set Aside if the repairs are satisfactorily completed during the time period established in the Repair Rider or such additional time as provided by the Commissioner. Unused funds remaining beyond the established time period shall not be disbursed. | ||||
| 24:24:2.1.1.2.6.3.138.1 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.101 Sale, assignment and pledge of insured mortgages. | HUD | (a) Sale of interests in insured mortgages. No mortgagee may sell or otherwise dispose of any mortgage insured under this part, or group of mortgages insured under this part, or any partial interest in such mortgage or mortgages by means of any agreement, arrangement or device except pursuant to this subpart. (b) Sale of insured mortgage to approved mortgagee. A mortgage insured under this part may be sold to another approved mortgagee. The seller shall notify the Commissioner of the sale within 15 calendar days, on a form prescribed by the Commissioner and acknowledged by the buyer. (c) Effect of sale of insured mortgage. When a mortgage insured under this part is sold to another approved mortgagee, the buyer shall thereupon succeed to all the rights and become bound by all the obligations of the seller under the contract of insurance and the seller shall be released from its obligations under the contract, provided that the seller shall not be relieved of its obligation to pay mortgage insurance premiums until the notice required by § 206.101(b) is received by the Commissioner. (d) Assignments, pledges and transfers by approved mortgagee. (1) An assignment, pledge, or transfer of a mortgage or group of mortgages insured under this part, not constituting a final sale, may be made by an approved mortgagee to another approved mortgagee provided the following requirements are met: (i) The assignor, pledgor or transferor shall remain the mortgagee of record. (ii) The Commissioner shall have no obligation to recognize or deal with any party other than the mortgagee of record with respect to the rights, benefits and obligations of the mortgagee under the contract of insurance. (2) An assignment or transfer of an insured mortgage or group of insured mortgages may be made by an approved mortgagee to other than an approved mortgagee provided the requirements under paragraphs (d)(1)(i) and (d)(1)(ii) of this section are met and the following additional requirements are met: (i) The assignee or transferee sh… | ||||
| 24:24:2.1.1.2.6.3.138.2 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.102 Insurance Funds. | HUD | Loans endorsed for insurance under this part, prior to October 1, 2008, shall be obligations of the General Insurance Fund. Loans endorsed for insurance under this part, on or after October 1, 2008, shall be obligations of the MMIF. | ||||
| 24:24:2.1.1.2.6.3.139.10 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.116 Refunds. | HUD | No amount of the initial MIP shall be refundable except as authorized by the Commissioner. | ||||
| 24:24:2.1.1.2.6.3.139.3 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.103 Payment of MIP. | HUD | (a) The payment of any MIP due under this subpart shall be made to the Commissioner by the mortgagee in cash until an event described in paragraph (b) or (c) of this section occurs. (b) Payment of the mortgage. The MIP shall no longer be remitted if the mortgage is paid in full. (c) Acquisition of title. (1) If the mortgagee or a party other than the mortgagee acquires title at a foreclosure sale, or the mortgagee acquires title by a deed in lieu of foreclosure, and the mortgagee notifies the Commissioner that a claim for the payment of the insurance benefits will not be presented, the MIP shall no longer be remitted. (2) If the mortgagee or a party other than the mortgagee acquires title at a foreclosure sale or the mortgagee acquires title by a deed in lieu of foreclosure, or where the property is sold in accordance with § 206.125(c), and a claim for the payment of the insurance benefits will be presented, the MIP shall no longer be remitted as of the date of the foreclosure sale, the date the deed in lieu of foreclosure is recorded, or the date in which the sale in accordance with § 206.125(c) is completed, as applicable. | ||||
| 24:24:2.1.1.2.6.3.139.4 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.105 Amount of MIP. | HUD | (a) Initial MIP. The mortgagee shall pay to the Commissioner an initial MIP that does not exceed three percent of the maximum claim amount. (b) Monthly MIP. The Commissioner may establish and collect a monthly MIP, which will accrue daily from the closing date, at a rate not to exceed 1.50 percent of the remaining insured principal balance, or up to 1.55 percent for any mortgage involving an original principal obligation that is greater than 95 percent of appraised value of the property. A mortgagee may only add the monthly MIP to the loan balance when paid to the Commissioner. (c) Calculation of the initial MIP. The mortgagee shall calculate the initial MIP based on the amount of funds the borrower has elected to be made available during the First 12-Month Disbursement Period, except that the calculation shall not include any funds set aside in the Servicing Fee Set Aside, if applicable. The initial MIP calculation shall be determined based on the sum of the following amounts: (1) For adjustable interest rate HECMs, the amount of Mandatory Obligations, the amount disbursed to the borrower at loan closing, and the amount of the available Initial Disbursement Limit not taken by the borrower at loan closing that the borrower selects to remain available during the First 12-Month Disbursement Period. (2) For fixed interest rate HECMs, the amount of Mandatory Obligations and the amount disbursed to the borrower at loan closing. (d) Adjustments to initial or monthly MIP. The Commissioner may adjust the amount of any initial or monthly MIP through notice. Such notice shall establish the effective date of any premium adjustment therein. | ||||
| 24:24:2.1.1.2.6.3.139.5 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.107 Mortgagee election of assignment or shared premium option. | HUD | (a) Election of option. Before the mortgage is submitted for insurance endorsement, the mortgagee shall elect either the assignment option or the shared premium option. (1) Under the assignment option, the mortgagee shall have the option of assigning the mortgage to the Commissioner if the outstanding loan balance is equal to or greater than 98 percent of the maximum claim amount, regardless of the deferral status, or the borrower has requested a payment which exceeds the difference between the maximum claim amount and the outstanding loan balance and: (i) The mortgagee is current in making the required payments under the mortgage to the borrower; (ii) The mortgagee is current in its payment of the MIP (and late charges and interest on the MIP, if any) to the Commissioner; (iii) The mortgage is not due and payable under § 206.27(c)(1), or, if due and payable under § 206.27(c)(1), its due and payable status has been deferred pursuant to a Deferral Period; (iv) An event described in § 206.27(c)(2) has not occurred, or the Commissioner has been so informed but has denied approval for the mortgage to be due and payable. At the mortgagee's option, the mortgagee may forgo assignment of the mortgage and file a claim under any of the circumstances described in § 206.123(a)(3)-(5); and (v) The mortgage is a first lien of record and title to the property securing the mortgage is good and marketable. The provisions of § 206.136 pertaining to mortgagee certifications also apply. (2) Under the shared premium option, the mortgagee may not assign a mortgage to the Commissioner unless the mortgagee fails to make payments and the Commissioner demands assignment (§ 206.123(a)(2)), but the mortgagee shall only be required to remit a reduced monthly MIP to the Commissioner. The mortgagee shall collect from the borrower the full amount of the monthly MIP provided in § 206.105(b) but shall retain a portion of the monthly MIP paid by the borrower as compensation for the default risk assumed by the mortgagee. The portion of the… | ||||
| 24:24:2.1.1.2.6.3.139.6 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.109 Amount of mortgagee share of premium. | HUD | Using the factors provided by the Commissioner, the amount of the mortgagee share of the premium shall be determined for each mortgage based upon the age of the youngest borrower or Eligible Non-Borrowing Spouse and the expected average mortgage interest rate. | ||||
| 24:24:2.1.1.2.6.3.139.7 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.111 Due date of MIP. | HUD | (a) Initial MIP. The mortgagee shall pay the initial MIP to the Commissioner within fifteen days of closing and as a condition to the endorsement of the mortgage for insurance. (b) Monthly MIP. Each monthly MIP shall be due to the Commissioner on the first business day of each month except the month in which the mortgage is closed. | ||||
| 24:24:2.1.1.2.6.3.139.8 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.113 Late charge and interest. | HUD | (a) Late charge. Initial MIP remitted to the Commissioner more than 5 days after the payment date in § 206.111(a) and monthly MIP remitted to the Commissioner more than 5 days after the payment date in § 206.111(b) shall include a late charge of four percent of the amount owed. (b) Interest. In addition to any late charge provided in paragraph (a) of this section, the mortgagee shall pay interest on any initial MIP remitted to the Commissioner more than 20 days after closing, and interest on any monthly MIP remitted to the Commissioner more than 5 days after the payment date prescribed in § 206.111(b). Such interest rate shall be paid at a rate set in conformity with the Treasury Financial Manual. (c) Paid by mortgagee. Any late charge and interest owed may not be added to the outstanding loan balance and must be paid by the mortgagee. | ||||
| 24:24:2.1.1.2.6.3.139.9 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.115 Insurance of mortgage. | HUD | (a) Mortgages with firm commitments. For applications for insurance involving mortgages not eligible to be originated under the Direct Endorsement program under § 203.5 (any reference to § 203.255 in § 203.5 shall mean § 206.115 for purposes of this section), the Commissioner will endorse the mortgage for insurance by issuing a Mortgage Insurance Certificate. (b) Endorsement with Direct Endorsement processing. For applications for insurance involving mortgages originated under the Direct Endorsement program under § 203.5 (any reference to § 203.255 in § 203.5 shall mean § 206.115 for purposes of this section), the mortgagee shall submit to the Commissioner, within 60 days after the date of closing of the loan or such additional time as permitted by the Commissioner, properly completed documentation and certifications as listed in this paragraph (b): (1) Property appraisal upon a form meeting the requirements of the Commissioner (including, if required, any additional documentation supporting the appraised value of the property under § 206.52), and a HUD conditional commitment, or a Lender's Notice of Value issued by the Lender Appraisal Processing Program (LAPP) approved lender when the appraisal was originally completed for use in a VA application, but only if the appraiser was also on the FHA roster as of the effective date of the appraisal, and all accompanying documents required by the Commissioner; (2) An application for insurance of the mortgage in a form prescribed by the Commissioner; (3) A certified copy of the mortgage and loan documents executed upon forms which meet the requirements of the Commissioner; (4) An underwriter certification, on a form prescribed by the Commissioner, stating that the underwriter has personally reviewed the appraisal report and credit application (including the analysis performed on the worksheets) and that the proposed mortgage complies with FHA underwriting requirements, and incorporates each of the underwriter certification items that apply to the mortgage submit… | ||||
| 24:24:2.1.1.2.6.3.140.11 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.117 General. | HUD | The Commissioner is required by statute to take any action necessary to provide a borrower with funds to which the borrower is entitled under the mortgage and which the borrower does not receive because of the default of the mortgagee. The Commissioner may hold a second mortgage to secure repayment by the borrower under § 206.27(d). Where the Commissioner does not hold a second mortgage, but makes a payment to the borrower, and such payment is not reimbursed by the mortgagee, the Commissioner shall accept assignment of the first mortgage. | ||||
| 24:24:2.1.1.2.6.3.140.12 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.119 [Reserved] | HUD | |||||
| 24:24:2.1.1.2.6.3.140.13 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.121 Commissioner authorized to make payments. | HUD | (a) Investigation. The Commissioner will investigate all complaints by a borrower concerning late payments. If the Commissioner determines that the mortgagee is unable or unwilling to make all payments required under the mortgage, including late charges, the Commissioner shall pay such payments and late charges to the borrower. (b) Reimbursement or assignment. The Commissioner may demand that within 30 days from the demand, the mortgagee reimburse the Commissioner, with interest from the date of payment by the Commissioner, or assign the insured mortgage to the Commissioner. Interest shall be paid at a rate set in conformity with the Treasury Financial Manual. If the mortgagee complies with the reimbursement demand, then the contract of insurance shall not be affected. If the mortgagee complies by assigning the mortgage for record within 30 days of the demand, then the Commissioner shall pay an insurance claim as provided in § 206.129(e)(3) and assume all responsibilities of the mortgagee under the first mortgage. If the mortgagee fails to comply with the demand within 30 days, the contract of insurance will terminate as provided in § 206.133(c). (c) Second mortgage. If the contract of insurance is terminated as provided in § 206.133(c), all payments to the borrower by the Commissioner will be secured by the second mortgage, unless otherwise provided by the Commissioner. Payments will be due and payable in the same manner as under the insured first mortgage. The liability of the borrower under the first mortgage shall be limited to payments actually made by the mortgagee to or on behalf of the borrower (including prior recoupment of the MIP remitted by the mortgagee and billed to the borrower), and shall exclude accrued interest, whether or not it has been included in the outstanding loan balance, and shared appreciation, if any. Interest will stop accruing on the first mortgage when the Commissioner begins to make payments under the second mortgage. The first mortgage will not be due and payable until th… | ||||
| 24:24:2.1.1.2.6.3.141.14 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.123 Claim procedures in general. | HUD | (a) Claims. Mortgagees may submit claims for the payment of the mortgage insurance benefits if: (1) The conditions of § 206.107(a)(1) pertaining to the optional assignment of the mortgage by the mortgagee have been met and the mortgagee assigns the mortgage to the Commissioner; (2) The mortgagee is unable or unwilling to make the payments under the mortgage and assigns the mortgage to the Commissioner pursuant to the Commissioner's demand, as provided in § 206.121(b); (3) The borrower or other permissible party sells the property for less than the outstanding loan balance and the mortgagee releases the mortgage of record to facilitate the sale, as provided in § 206.125(c); (4) The mortgagee acquires title to the property by foreclosure or a deed in lieu of foreclosure and sells the property as provided in § 206.125(g) for an amount which does not satisfy the outstanding loan balance or fails to sell the property as provided in § 206.127(a)(2); or (5) The mortgagee forecloses and a bidder other than the mortgagee purchases the property for an amount that is not sufficient to satisfy the outstanding loan balance, as provided in § 206.125(e). (b) [Reserved] | ||||
| 24:24:2.1.1.2.6.3.141.15 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.125 Acquisition and sale of the property. | HUD | (a) Initial action by the mortgagee. (1) The mortgagee shall notify the Commissioner within 60 days of the mortgage becoming due and payable when the conditions stated in the mortgage, as required by § 206.27(c)(1) have occurred or when the Deferral Period ends. The mortgagee shall notify the Commissioner within 30 days when one of the conditions stated in the mortgage, as required by § 206.27(c)(2), has occurred. (2) After notifying and receiving approval of the Commissioner when needed, the mortgagee shall notify the borrower, Eligible Non-Borrowing Spouse, borrower's estate, and borrower's heir(s), as applicable, within 30 days of the later of notifying the Commissioner or receiving approval, if needed, that the mortgage is due and payable. The mortgagee shall give the applicable party 30 days from the date of notice to engage in the following actions: (i) Pay the outstanding loan balance, including any accrued interest, MIP, and mortgagee advances in full; (ii) Sell the property for an amount not to be less than the amount determined by the Commissioner through notice, which shall not exceed 95 percent of the appraised value as determined under § 206.125(b), with the net proceeds of the sale to be applied towards the outstanding loan balance. Closing costs shall not exceed the greater of: 11 percent of the sales price; or a fixed dollar amount as determined by the Commissioner through Federal Register notice. For the purposes of this section, sell includes the transfer of title by operation of law; (iii) Provide the mortgagee with a deed in lieu of foreclosure; (iv) Correct the condition which resulted in the mortgage coming due and payable for reasons other than the death of the last surviving borrower; (v) For an Eligible Non-Borrowing Spouse, correct the condition which resulted in an end to the Deferral Period in accordance with § 206.57; or (vi) Such other actions as permitted by the Commissioner through notice. (3) For a borrower, even after a foreclosure proceeding is begun, the mortgagee… | ||||
| 24:24:2.1.1.2.6.3.141.16 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.127 Application for insurance benefits. | HUD | (a) Mortgagee acquires title. (1) The mortgagee shall apply for the payment of the insurance benefits within 30 days after the sale of the property by the mortgagee or within such additional time as approved by the Commissioner. Application shall be made by notifying the Commissioner of the sale of the property, the sale price, and income and expenses incurred in connection with the acquisition, repair, and sale of the property. (2) If the property will not be sold within six months from the foreclosure sale date where the mortgagee is the successful bidder, the mortgagee shall apply for the insurance benefit not later than 30 days after the end of the six-month period, substituting the appraised value, using a valid appraisal, for the sale price. The mortgagee may add the cost of the appraisal to the claim amount. (b) Party other than the mortgagee acquires title. The mortgagee shall apply for the payment of the insurance benefits within 30 days after a party other than the mortgagee acquires title to the property. Application shall be made by notifying the Commissioner of the sale of the property and the sale price. Transferring a portfolio that includes REO properties to another entity does not constitute a “sale” under this section. (c) Mortgagee assigns the mortgage. The mortgagee shall file its claim for the payment of insurance benefits within 15 days after the date the assignment of the mortgage to the Commissioner is filed for recording. The application for the payment of the insurance benefits shall include the items listed in § 206.135(a) and the certification required under § 206.136. (d) Contract of insurance not terminated. Mortgagees may only file an application for insurance benefits provided the contract of insurance has not terminated. | ||||
| 24:24:2.1.1.2.6.3.141.17 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.129 Payment of claim. | HUD | (a) General. If the claim for the payment of the insurance benefits is acceptable to the Commissioner, payment shall be made in cash in the amount determined under this section. (b) Limit on claim amount. (1) For HECMs assigned Case Numbers prior to September 19, 2017, in no case may the claim paid under this subpart exceed the maximum claim amount. The interest allowance provided in paragraphs (d)(3)(x), (e)(2), and (f)(2)(i) of this section shall not be included in determining the limit on the claim amount. (2) For HECMs assigned Case Numbers on or after September 19, 2017, in no case may the claim paid under this subpart exceed the maximum claim amount, as defined in § 206.3. The interest allowance provided in paragraphs (d)(3)(x), (e)(2) and (f)(2)(ii) of this section shall be made in cash in the amount determined under this section and shall be included in determining the limit on the claim amount. (c) Shared appreciation mortgages. The terms loan balance and accrued interest as used in this section do not include interest attributable to the mortgagee's share of the appreciated value of the property. (d) Amount of payment—mortgagee acquires title or is unsuccessful bidder. This paragraph describes the amount of payment if the mortgagee acquires title by purchase, foreclosure, or deed in lieu of foreclosure, or when a party other than the mortgagee is the successful bidder at the foreclosure sale. (1) Due and payable date means the date when the mortgagee notifies or should have notified the Commissioner that the mortgage is due and payable under the conditions stated in the mortgage, as required by § 206.27(c)(1) or the date that the Deferral Period, as provided for in the mortgage by § 206.27(c)(3), ends; or the date the Commissioner approved a due and payable request as provided for in the mortgage by § 206.27(c)(2). (2) The amount of the claim shall be computed by: (i) Totaling the outstanding loan balance and any accrued interest and servicing fees which have not been added to the o… | ||||
| 24:24:2.1.1.2.6.3.141.18 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.130 Amount of payment—HECM Single Family Sale assignments. | HUD | [89 FR 99716, Dec. 11, 2024] | (a) Time of payment. Upon an assignment of a mortgage insured under this part that is acceptable to the Commissioner, made pursuant to a HECM Single Family Sale and in accordance with § 291.609 or § 291.619 of this chapter, the Commissioner shall pay to the mortgagee the unpaid principal balance of the loan at the time of assignment and an amount calculated in accordance with the Participating Servicer Agreement (PSA), as defined in § 291.601 of this chapter. (b) Acceptability criteria. For assignment, the mortgagee must determine and certify the mortgage satisfies the Commissioner's acceptability criteria for the Single Family Sale. (c) Reduction in claim. The mortgagee's claim for insurance will be reduced for failure to take the required actions within the specified schedule of dates for the Single Family Sale, as specified in the PSA. (d) Curtailment of debenture interest. HUD will curtail debenture interest at the thirtieth (30th) day following the earliest anticipated claim submission date, as identified on the schedule of dates in the PSA, if: (1) The mortgagee's claim for insurance is not submitted to HUD; or (2) The claim for insurance is in a suspended status. (e) Debenture Interest. For purposes of this section, Debenture Interest means interest at the debenture rate as computed by HUD in accordance with its rules and requirements for such calculations, on the unpaid principal balance as of the claim payment date, plus the approved reimbursable expenses identified in the PSA, minus any amount of such interest or expenses that would have been curtailed or for which the Participating Servicer would have been denied reimbursement pursuant to HUD's requirements for servicing due and payable notes and processing claims, including § 206.129(d)(3)(x), had the Participating Servicer foreclosed or the borrower sold the property in connection with an insurance claim. (f) Rejection of the claim. HUD may reject the mortgagee's claim for insurance and exclude the related mortgage from set… | |||
| 24:24:2.1.1.2.6.3.142.19 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.131 Contract rights and obligations for mortgages on individual dwelling units in a condominium. | HUD | [82 FR 7117, Jan. 19, 2017, as amended at 84 FR 41877, Aug. 15, 2019] | (a) Additional requirements. The requirements of this subpart shall be applicable to mortgages on individual dwelling units in a condominium, except as modified by this section. (b) References. The term property as used in this subpart shall be construed to include the individual dwelling unit and the undivided interest in the common areas and facilities as may be designated. (c) Assignment of the mortgage. If the mortgagee assigns the mortgage on the individual dwelling unit to the Commissioner, the mortgagee shall certify: (1) To any changes in the plan of apartment ownership including the administration of the property; (2) That as of the date the assignment is filed for record, the family unit is assessed and subject to assessment for taxes pertaining only to that unit; and (3) To the condition of the property as of the date the assignment is filed for record. For units in projects with mortgages insured under 24 CFR part 234, § 234.275 of this chapter concerning the certification of condition applies. (d) Condition of the multifamily structure. In projects with mortgages insured under 24 CFR part 234, the provisions of § 234.270(a) and (b) of this chapter concerning the condition of the multifamily structure in which the property is located shall be applicable to mortgages insured under this part which are assigned to the Commissioner. | |||
| 24:24:2.1.1.2.6.3.143.20 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.133 Termination of insurance contract. | HUD | (a) Payment of the mortgage. The contract of insurance shall be terminated if the mortgage is paid in full. (b) Acquisition of title. (1) If the mortgagee or a party other than the mortgagee acquires title at a foreclosure sale, or the mortgagee acquires title by a deed in lieu of foreclosure, and the mortgagee notifies the Commissioner that a claim for the payment of the insurance benefits will not be presented, the contract of insurance shall be terminated. (2) For HECMs with Case Numbers assigned on or after September 19, 2017, if the mortgagee or a party other than the mortgagee acquires title at a foreclosure sale or the mortgagee acquires title by a deed in lieu of foreclosure and a claim for the payment of the insurance benefits will be presented, the contract of insurance shall be terminated as of claim payment. (c) Mortgagee fails to make payments. If the mortgagee fails to make the payments to the borrower as required under the mortgage, and does not reimburse the Commissioner or assign the mortgage to the Commissioner within 30 days from the demand by the Commissioner for reimbursement or assignment, the contract of insurance shall automatically terminate. The Commissioner may later reinstate the contract of insurance, which shall continue in force as if no termination had occurred, upon reimbursement with interest as provided in § 206.121. Upon reinstatement, the mortgagee shall be liable for all MIP which would have been due if no termination had occurred, including late charge and interest as provided in § 206.113. (d) Notice of termination. The mortgagee shall give written notice to the Commissioner, or other notice acceptable to the Commissioner, within 15 days of the occurrence of an event under paragraphs (a) and (b) of this section. No contract of insurance shall be terminated under paragraphs (a) or (b) of this section unless such notice is given. (e) Voluntary termination. The mortgagor and the mortgagee may jointly request the Commissioner to approve the voluntary termination … | ||||
| 24:24:2.1.1.2.6.3.144.21 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.134 Partial release, addition or substitution of security. | HUD | [82 FR 7117, Jan. 19, 2017, as amended at 87 FR 70744, Nov. 21, 2022] | (a) A mortgagee shall not release the security or any part thereof, while the mortgage is insured, without the prior consent of the Commissioner. (b) A mortgagee may, with the prior consent of the Commissioner, accept an addition to, or substitution of, security for the purpose of removing the dwelling to a new lot or replacing the dwelling with a similar or like kind on the existing lot under the following conditions: (1) The mortgagee obtains a good and valid first lien on the property to which the dwelling is removed or the existing lot upon which the dwelling is rebuilt; (2) All damages to the structure are repaired or all rebuilding of the structure is completed without cost to FHA; and (3) The property to which the dwelling is removed or rebuilt is in an area known to be reasonably free from natural hazards or, if in a flood zone, the borrower will insure or reinsure under the National Flood Insurance Program or obtain equivalent private flood insurance coverage, as defined in § 203.16a of this chapter. (c) A mortgagee may, without the prior consent of the Commissioner, accept an addition to, or substitution of, security for the purpose of removing the dwelling to a new lot under the following conditions: (1) The dwelling has survived an earthquake or other disaster with little damage, but continued location on the property might be hazardous; (2) The conditions stated in paragraph (b) of this section exist; and (3) Immediately following the emergency removal the mortgagee notifies the Commissioner of the reasons for removal. | |||
| 24:24:2.1.1.2.6.3.144.22 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.135 Application for insurance benefits and fiscal data. | HUD | (a) On the date the application for assignment is filed, the mortgagee shall submit to the Commissioner: (1) Credit and security instrument. The original credit and security instruments assigned without recourse or warranty, except that no act or omission of the mortgagee shall have impaired the validity and priority of the mortgage. (2) Proposed assignment instrument. A copy of the proposed assignment of mortgage. (3) Hazard and flood insurance. All hazard and flood insurance (if applicable) policies held in connection with the mortgaged property, together with a copy of the mortgagee's notification to the carrier authorizing the amendment of the loss payable clause substituting the Commissioner as the mortgagee. (4) Rights and interests. An assignment of all rights and interests arising under the mortgage, and all claims of the mortgagee against the borrower or others arising out of the mortgage transaction. (5) Property. All property of the borrower held by the mortgagee or to which it is entitled (other than the cash items which are to be retained by the mortgagee). (6) Records and accounts. All records, ledger cards, documents, books, papers and accounts relating to the mortgage transaction. (7) Additional information. Any additional information or data which the Commissioner may require. (8) Title evidence. All title evidence held by the mortgagee. It need not be extended to include the recordation of the assignment. The title insurance policy shall be endorsed from the mortgage insurance company up to the point of assignment. At the point of assignment, the Commissioner shall be named insured under such policy. (b) All documents required in paragraph (a) of this section must be submitted and approved before a claim for assignment may be submitted. (c) Recorded assignment instrument. The original of the recorded assignment of mortgage shall be forwarded to the Commissioner as soon as received by the mortgagee, but in no case shall it be longer than 12 months after recordation. If… | ||||
| 24:24:2.1.1.2.6.3.144.23 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.136 Conditions for assignment. | HUD | (a) In order for a HECM to be eligible for assignment, the following must be met: (1) Priority of mortgage to liens. The mortgage is prior to all mechanics' and materialmen's liens, regardless of when such liens attach, and prior to all liens and encumbrances, or defects which may arise based on any act or omission by the mortgagee except such liens or other matters as may have been approved by the Commissioner. (2) Amount due. The amount stated in the instrument of assignment is actually due and owing under the mortgage. (3) Offsets or counterclaims. There are no offsets or counterclaims thereto and the mortgagee has a good right to assign. (b) The mortgagee shall certify that the conditions of paragraph (a) have been met. | ||||
| 24:24:2.1.1.2.6.3.144.24 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.137 Effect of noncompliance with regulations. | HUD | If, for any reason, the mortgagee fails to comply with the regulations in this subpart, the Commissioner may hold processing of the application for insurance benefits in abeyance for a reasonable time in order to permit the mortgagee to comply. In the alternative to holding processing in abeyance, the Commissioner may reconvey title to the property or reassign the mortgage to the mortgagee, in which event the application for insurance benefits shall be considered as cancelled and the mortgagee shall refund the insurance benefits to the Commissioner as well as other funds required by § 206.138. The mortgagee may reapply for insurance benefits at a subsequent date; provided, however, that the mortgagee may not be reimbursed for any expenses incurred in connection with the property after it has been reconveyed or the mortgage reassigned by the Commissioner, or paid any debenture interest accrued after the date of initial conveyance, whichever is earlier, and there will be deducted from the insurance benefits any reduction in the Commissioner's estimate of the value of the property occurring from the time of reconveyance or mortgage reassignment to the time of reapplication. | ||||
| 24:24:2.1.1.2.6.3.144.25 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.138 Mortgagee's liability for certain expenditures. | HUD | Where the Commissioner accepts an assignment, acquires a property after accepting an assignment of a mortgage, or otherwise pays a claim for insurance benefits and thereafter it becomes necessary for the Commissioner to either reconvey the property or reassign the mortgage to the mortgagee due to the mortgagee's noncompliance with these regulations, the mortgagee shall reimburse the Commissioner for all expenses incurred in connection with such acquisition and reconveyance or reassignment. The reimbursement shall include interest on the amount of insurance benefits refunded by the mortgagee from the date the insurance benefits were paid to the date of refund at an interest rate set in conformity with the Treasury Fiscal Requirements Manual, and the Commissioner's cost of holding the property or servicing the mortgage, accruing on a daily basis, from the date of assignment or claim payment to the date of reconveyance or reassignment. These costs are based on the Commissioner's estimate of the taxes, maintenance and operating expenses of the property, and administrative expenses. Appropriate adjustments shall be made by the Commissioner on account of any income received from the property. | ||||
| 24:24:2.1.1.2.6.3.144.26 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.140 Inspection and preservation of properties. | HUD | The mortgagee, upon learning that a property subject to a mortgage insured under this part is vacant or abandoned, shall be responsible for the inspection of such property at least monthly, if the loan is in a due and payable status. When a mortgage is in due and payable status and efforts to reach the borrower or applicable party by telephone within that period have been unsuccessful, the mortgagee shall be responsible for a visual inspection of the security property to determine whether the property is vacant. The mortgagee shall take reasonable action to protect and preserve such security property when it is determined or should have been determined to be vacant or abandoned until assigned to the Commissioner or an application for insurance benefits is filed, if such action does not constitute an illegal trespass. “Reasonable action” includes the commencement of foreclosure within the time required by § 206.125. | ||||
| 24:24:2.1.1.2.6.3.144.27 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.141 Property condition. | HUD | (a) Condition at time of transfer. When the mortgage is assigned to the Commissioner or the property is sold by the mortgagee, the property shall be undamaged by fire, earthquake, flood, or tornado, except as set forth in this subpart. (b) Damage to property by waste. The mortgagee shall not be liable for damage to the property by waste committed by the borrower, its heirs, successors or assigns in connection with mortgage insurance claims. (c) Mortgagee responsibility. The mortgagee shall be responsible for: (1) Damage by fire, flood, earthquake, hurricane, or tornado; and (2) Damage to or destruction of security properties on which the loans are in default and which properties are vacant or abandoned, when such damage or destruction is due to the mortgagee's failure to take reasonable action to inspect, protect and preserve such properties as required by § 206.140. (d) Limitation. The mortgagee's responsibility for property damage shall not exceed the amount of its insurance claim as to a particular property. | ||||
| 24:24:2.1.1.2.6.3.144.28 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.142 Adjustment for damage or neglect. | HUD | (a) Except as provided for in paragraphs (a)(1) and (a)(2) of this section: if the property has been damaged by fire, flood, earthquake, hurricane, or tornado, the damage must be repaired before assignment of the mortgage to the Commissioner; if the property has suffered damage because of the mortgagee's failure to take action as required by § 206.140, the damage must be repaired before the mortgagee sells the property. (1) If the prior approval of the Commissioner is obtained, there will be deducted from the insurance benefits the Commissioner's estimate of the cost of repairing the damage or any insurance recovery received by the mortgagee, whichever is greater. (2) If the property has been damaged by fire and was not covered by fire insurance at the time of the damage, or the amount of insurance coverage was inadequate to repair fully the damage, only the amount of insurance recovery received by the mortgagee, if any, will be deducted from the insurance benefits, provided the mortgagee certifies, at the time that a claim is filed for insurance benefits, that: (i) At the time the mortgage was insured, the property was covered by fire insurance in an amount at least equal to the lesser of 100 percent of the insurable value of the improvements, or the principal loan balance of the mortgage; (ii) The insurer later cancelled this coverage or refused to renew it for reasons other than nonpayment of premium; (iii) The mortgagee made diligent though unsuccessful efforts within 30 days of any cancellation or non-renewal of hazard insurance, and at least annually thereafter, to secure other coverage or coverage under a FAIR Plan, in an amount described in paragraph (a)(2)(i) of this section, or if coverage to such an extent was unavailable at a reasonable rate, the greatest extent of coverage that was available at a reasonable rate; (iv) The extent of coverage obtained by the mortgagee in accordance with paragraph (a)(2)(iii) of this section was the greatest available at a reasonable rate, or if the mortgagee was … | ||||
| 24:24:2.1.1.2.6.3.144.29 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.143 Certificate of property condition. | HUD | (a) The mortgagee shall certify that as of the date the mortgagee sold the property in accordance with § 206.125(g) or assignment of the mortgage to the Commissioner, the property was: (1) Undamaged by fire, flood, earthquake, hurricane or tornado; and (2) Undamaged due to failure of the mortgagee to take action as required by § 206.140; and (3) Undamaged while the property was in the possession of the mortgagee. (b) In the absence of evidence to the contrary, the mortgagee's certificate or description of the damage shall be accepted by the Commissioner as establishing the condition of the property, as of the date of mortgagee sale or assignment of the mortgage to the Commissioner. | ||||
| 24:24:2.1.1.2.6.3.144.30 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.144 Final payment. | HUD | The mortgagee may not file any supplemental claims to its mortgage insurance claim after six months from settlement by the Commissioner of the claim payment except where the Commissioner determines it appropriate and expressly authorizes an extension of time for supplemental claim filings. | ||||
| 24:24:2.1.1.2.6.3.144.31 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.145 Items deducted from payment. | HUD | (a) There shall be deducted from the total of the added items in § 206.129 the following cash items: (1) All amounts received by the mortgagee on account of the mortgage after the institution of foreclosure proceedings or the acquisition of the property or otherwise after due and payable. (2) All amounts received by the mortgagee from any source relating to the property on account of rent or other income after deducting reasonable expenses incurred in handling the property. (3) All cash retained by the mortgagee including amounts held or deposited for the account of the borrower or to which it is entitled under the mortgage transaction that have not been applied in reduction of the outstanding loan balance. (4) With regard to claims filed pursuant to successful short sales, all amounts received by the mortgagee relating to the sale of the property. (b) [Reserved] | ||||
| 24:24:2.1.1.2.6.3.144.32 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | C | Subpart C—Contract Rights and Obligations | § 206.146 Debenture interest rate. | HUD | (a) Debentures shall bear interest from the date of issue, payable semiannually on the first day of January and the first day of July of each year at the rate in effect as of the day the commitment was issued, or as of the date the mortgage was endorsed for insurance, whichever rate is higher. For applications involving mortgages originated under the single family Direct Endorsement program, debentures shall bear interest from the date of issue, payable semiannually on the first day of January and on the first day of July of each year at the rate in effect as of the date the mortgage was endorsed for insurance; (b) For mortgages endorsed for insurance after January 23, 2004, if an insurance claim is paid in cash, the debenture interest rate for purposes of calculating such a claim shall be the monthly average yield, for the month in which the default on the mortgage occurred, on United States Treasury Securities adjusted to a constant maturity of 10 years. | ||||
| 24:24:2.1.1.2.6.4.145.1 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | D | Subpart D—Servicing Responsibilities | § 206.201 Mortgage servicing generally; sanctions. | HUD | (a) General. This subpart identifies servicing practices that the Commissioner considers acceptable mortgage servicing practices of lending institutions servicing mortgages insured by the Commissioner. Failure to comply with this subpart shall not be a basis for denial of the insurance benefits, but a pattern of refusal or failure to comply will be cause for withdrawal of FHA mortgagee approval. (b) Importance of timely payments. The paramount servicing responsibility is to make timely payments in full as required by the mortgage. Any failure of a mortgagee to make all payments required by the mortgage in a timely manner will be grounds for administrative sanctions authorized by regulations, including 2 CFR part 2424 (Debarment, Suspension, and Limited Denial of Participation), and 24 CFR part 25 (Mortgagee Review Board). (c) Responsibility for servicing. (1) Servicing of insured mortgages must be performed by a mortgagee that is approved by FHA to service insured mortgages. The servicer must fully discharge the servicing responsibilities of the mortgagee as outlined in this part. The mortgagee shall remain fully responsible to the Commissioner for proper servicing, and the actions of its servicer shall be considered to be the actions of the mortgagee. The servicer also shall be fully responsible to the Commissioner for its actions as a servicer. (2) Whenever servicing of any mortgage is transferred from one mortgagee or servicer to another, notice of the transfer of service shall be delivered: (i) By the transferor mortgagee or servicer to the borrower. The notification shall be delivered not less than 15 days before the effective date of the transfer and shall contain the information required in 12 CFR 1024.33(b)(4); and (ii) By the transferee mortgagee or servicer: (A) To the borrower. The notification shall be delivered not less than 15 days before the effective date of the transfer and shall contain the information required in 12 CFR 1024.33(b)(4); and (B) To the Commissioner. This notificat… | ||||
| 24:24:2.1.1.2.6.4.145.2 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | D | Subpart D—Servicing Responsibilities | § 206.203 Providing information | HUD | (a) Statements of account activity. The mortgagee shall provide to the borrower a monthly statement regarding the activity of the mortgage for each month, as well as for the calendar year. The statement shall summarize the total principal amount which has been paid to the borrower under the mortgage during that calendar year, the MIP paid to the Commissioner and charged to the borrower, the total amount of deferred interest added to the outstanding loan balance, the total outstanding loan balance, and the current principal limit. The mortgagee shall include an accounting of all payments for property charges. The statement shall be provided to the borrower monthly until the mortgage is paid in full by the borrower. The mortgagee shall provide the borrower with a new payment plan every time it recalculates monthly payments or the payment option is changed. The statements shall be in a format acceptable to the Commissioner. (b) [Reserved] (c) Servicing—Providing information. (1) Mortgagees shall provide loan information to borrowers and arrange for individual loan consultation on request. The mortgagee must establish written procedures and controls to assure prompt responses to inquiries. One or more of the following means of making information readily available to borrowers is required: (i) A servicing office staffed with competent personnel located within 200 miles of the property, capable of providing timely responses to requests for information. Complete records need not be maintained in such an office if the staff is able to secure needed information and pass it on to the borrower. (ii) Toll-free telephone service at an office capable of providing needed information. (2)(i) All borrowers must be informed of and reminded annually of the system available for obtaining answers to loan inquiries and the office from which needed information may be obtained. Toll-free telephone service need not be provided to a borrower other than at the office designated to serve the borrower nor other than from the immedia… | ||||
| 24:24:2.1.1.2.6.4.145.3 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | D | Subpart D—Servicing Responsibilities | § 206.205 Property charges | HUD | (a) General. (1) The borrower shall be responsible for the payment of the following property charges before or on the due date: ground rents, condominium fees, planned unit development fees, and homeowners' association fees. (2) Payment of the following property charges are obligations of the borrower and shall be made through the LESA, by the borrower, or by the mortgagee, in accordance with paragraphs (b) through (e) of this section on or before the due date: property taxes, including any special assessments levied by local or State law, hazard insurance premiums, and applicable flood insurance premiums. (b) Method of property charge payment —(1) LESA required. For fixed or adjustable interest rate HECMs, based on the results of the Financial Assessment, the mortgagee may require the borrower to have a Fully-Funded LESA for the payment of property charges identified in paragraph (a)(2) of this section. For adjustable interest rate HECMs, based on the results of the Financial Assessment, the mortgagee may require the borrower to have a Partially-Funded LESA for the payment of property charges identified in paragraph (a)(2) of this section. (2) LESA not required. (i) If, based on the results of the Financial Assessment, the mortgagee does not require the borrower to have a LESA, the borrower shall elect one of the following at closing, whereby an election of the option in paragraph (b)(2)(i)(B) or (C) of this section cannot be cancelled by the borrower: (A) Borrower is responsible for the independent payment of all property charges; (B) Borrower elects to have a Fully-Funded LESA for the payment of property charges identified in paragraph (a)(2) of this section; or (C) For adjustable interest rate HECMs only, borrower elects to have the mortgagee pay property charges listed in paragraph (a)(2) of this section which would have otherwise been required to be paid by the borrower, in accordance with paragraph (d) of this section. (ii) Through Federal Register notice, the Commissioner may establish an … | ||||
| 24:24:2.1.1.2.6.4.145.4 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | D | Subpart D—Servicing Responsibilities | § 206.207 Allowable charges and fees after endorsement | HUD | (a) Reasonable and customary charges. The mortgagee may collect reasonable and customary charges and fees from the borrower after insurance endorsement, only to the extent that the mortgagee is not reimbursed for such fees by FHA, by adding them to the outstanding loan balance, but only for: items listed in paragraph (a)(1) of this section; items authorized by the Commissioner under paragraph (a)(2) of this section, or as provided at § 206.26(b)(1)(iii); or charges and fees related to additional documents described in § 206.27(b)(10) and related title search costs. (1)(i) Charges for substitution of a hazard insurance policy at other than the expiration of term of the existing hazard insurance policy; (ii) Attorney's and trustee's fees and expenses actually incurred (including the cost of appraisals and cost of advertising) when a case has been referred for foreclosure in accordance with the provisions of this part after a firm decision to foreclose if foreclosure is not completed because of a reinstatement of the account (no attorney's fee may be charged for the services of the mortgagee's or servicer's staff attorney or for the services of a collection attorney other than the attorney handling the foreclosure); (iii) A trustee's fee if the security instrument in deed-of-trust states provides for payment of such a fee for execution of a satisfactory, release, or trustee's deed when the deed of trust is paid in full; (iv) Where permitted by the security instrument, attorney's fees and expenses actually incurred in the defense of any suit or legal proceeding wherein the mortgagee shall be made a party thereto by reason of the mortgage (no attorney's fee may be charged for the services of the mortgagee's or servicer's staff attorney); and (v) Property preservation expenses incurred pursuant to § 206.140. (2) Such other reasonable and customary charges as may be authorized by the Commissioner, but which shall not include: (i) Charges for servicing activities of the mortgagee or servicer; (ii) Fees charged … | ||||
| 24:24:2.1.1.2.6.4.145.5 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | D | Subpart D—Servicing Responsibilities | § 206.209 Prepayment. | HUD | (a) No charge or penalty. The borrower may repay a mortgage in full or prepay a mortgage in part without charge or penalty at any time, regardless of any limitations on repayment or prepayment stated in a mortgage. (b) Insurance and condemnation proceeds. If insurance or condemnation proceeds are paid to the mortgagee, the principal limit and the outstanding loan balance shall be reduced by the amount of the proceeds not applied to restoration or repair of the damaged property. (c) Funds received from a partial prepayment shall be applied in accordance with the Note. | ||||
| 24:24:2.1.1.2.6.4.145.6 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | D | Subpart D—Servicing Responsibilities | § 206.211 Determination of principal residence and contact information. | HUD | (a) Annual certification. At least once during each calendar year, the mortgagee shall verify the contact information for the borrower(s) and determine whether or not the property is the principal residence of at least one borrower. The mortgagee shall require each borrower to make an annual certification of his or her contact information and principal residence. As part of the annual certification, the borrower may designate an alternate individual as specified in § 206.40 to receive copies of the notifications from the mortgagee, and who the mortgagee shall contact if the borrower is unwilling or unable to reply to requests from the mortgagee. The mortgagee may rely on the certification unless it has information indicating that the certification may be false. (b) Requirements when an Eligible Non-Borrowing Spouse exists. Where an Eligible Non-Borrowing Spouse has been identified, the mortgagee shall obtain an additional annual certification from the borrower confirming the Eligible Non-Borrowing Spouse remains his or her spouse and the Eligible Non-Borrowing Spouse continues to reside in the property as his or her principal residence. (1) Death of borrower with Eligible Non-Borrowing Spouse. If a borrower with an Eligible Non-Borrowing Spouse has died, the mortgagee shall obtain the annual certification in paragraph (a) of this section from the Eligible Non-Borrowing Spouse. For purposes of this paragraph, the term “Eligible Non-Borrowing Spouse” shall replace the term “borrower” in paragraph (a) of this section. (2) Failure of previously Eligible Non-Borrowing Spouse to reside in the property as his or her principal residence. If a Non-Borrowing Spouse fails to reside in the property as his or her principal residence, the Non-Borrowing Spouse becomes an Ineligible Non-Borrowing Spouse and the deferral of due and payable status that would prevent the displacement of an Eligible Non-Borrowing Spouse will no longer be in effect. Once this occurs, the Eligible Non-Borrowing Spouse annual certifications … | ||||
| 24:24:2.1.1.2.6.5.145.1 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | E | Subpart E—HECM Counselor Roster | § 206.300 General. | HUD | This subpart provides for the establishment of the HECM Counselor Roster (Roster) and sets forth the requirements for the operation of the HECM Counselor Roster. | ||||
| 24:24:2.1.1.2.6.5.145.2 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | E | Subpart E—HECM Counselor Roster | § 206.302 Establishment of the HECM Counselor Roster. | HUD | (a) HECM Counselor Roster. FHA maintains a Roster of HECM counselors. Only counselors listed on the Roster and employed by a participating agency are approved to provide HECM counseling. A prospective borrower applying for a HECM loan to be insured by FHA must receive the required HECM counseling from one of the counselors on the Roster. (b) Disclaimer. The inclusion of a HECM counselor on the Roster does not create or imply a warranty or endorsement by FHA of the listed counselor to a prospective HECM borrower or to any other organization or individual, nor does it represent a warranty of any counseling provided by the listed HECM counselor. The inclusion of a counselor on the Roster means that a listed counselor has met the FHA-prescribed qualifications and conditions for inclusion on the Roster and that the counselor is approved to provide HECM counseling by telephone or face-to-face. | ||||
| 24:24:2.1.1.2.6.5.145.3 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | E | Subpart E—HECM Counselor Roster | § 206.304 Eligibility for placement on the HECM Counselor Roster. | HUD | (a) Application. To be considered for placement on the Roster, a housing counselor must apply to FHA in a form and in a manner prescribed by the Commissioner. (b) Eligibility. FHA will approve an application for placement on the Roster if the application demonstrates that the housing counselor: (1) Is employed by a HUD-approved housing counseling agency or an affiliate of a HUD-approved intermediary or State housing finance agency; (2) Successfully passed a standardized HECM counseling exam administered by FHA, or a party selected by FHA, within the last 3 years. In order to maintain eligibility, a HECM counselor must successfully pass a standardized HECM counseling exam every 3 years; (3) Received training and education related to HECMs within the prior 2 years; (4) Has access to and is supported by technology that enables FHA to track the results of the counseling offered to each loan applicant, e.g., what action(s), if any, did the client take after receiving the HECM counseling; and (5) Is not listed on: (i) The General Services Administration's Suspension and Debarment List; (ii) HUD's Limited Denial of Participation List; or (iii) HUD's Credit Alert Interactive Response System. | ||||
| 24:24:2.1.1.2.6.5.145.4 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | E | Subpart E—HECM Counselor Roster | § 206.306 Removal from the HECM Counselor Roster. | HUD | (a) General. FHA reserves the right to remove a HECM counselor from the Roster, in accordance with this section. (b) Cause for removal. Cause for removal of a HECM counselor from the Roster includes, but is not limited to: (1) Failure to comply with the education and training requirements of § 206.308; (2) Failure to respond within a reasonable time to HUD inquiries or requests for documentation; (3) Misrepresentation or fraudulent statements; (4) Promotion, representation, or recommendation of any specific mortgagee; (5) Failure to comply with applicable fair housing and civil rights requirements; (6) Failure to comply with applicable statutes and regulations; (7) Failure to comply with applicable statutory counseling requirements found at section 255(f) of the National Housing Act, which include, but are not limited to, providing information about: options other than a HECM, the financial implications of entering into a HECM, the tax consequences of a HECM, and any other information that HUD or the applicant may request; (8) Failure to maintain any registration, license, or certification requirements of a State or local authority; (9) Unsatisfactory performance in providing counseling to HECM loan applicants. FHA may determine that a HECM counselor's performance is unsatisfactory based on a review of counseling files or other monitoring activities, or if the counselor fails to employ the minimum competencies, as measured by the FHA-administered HECM counseling exam; or (10) For any other reason HUD determines to be so serious as to justify an administrative sanction. (c) Automatic removal from HECM Counselor Roster for failure to maintain required State or local licensure. A HECM counselor who is required to maintain a State or local registration, license, or certification and whose registration or certification is revoked, suspended, or surrendered will be automatically suspended from the Roster until FHA receives evidence demonstrating that the local- or State-imposed sanction has been lifte… | ||||
| 24:24:2.1.1.2.6.5.145.5 | 24 | Housing and Urban Development | II | B | 206 | PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE | E | Subpart E—HECM Counselor Roster | § 206.308 Continuing education requirements of counselors listed on the HECM Counselor Roster. | HUD | A HECM counselor listed on the Roster must receive, on a continuing basis, training, education, and technical assistance related to HECMs. The HECM counselor must maintain evidence of the successful completion of such continuing education, and such evidence must be made available to FHA upon request. FHA will consider a HECM counselor's successful completion of a HECM course no less than once every 2 years as satisfying the requirements of this section. |
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