[Federal Register Volume 79, Number 85 (Friday, May 2, 2014)]
[Notices]
[Pages 25147-25148]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-10102]


-----------------------------------------------------------------------

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5735-N-02]


Home Equity Conversion Mortgage (HECM) Program: Non-Borrowing 
Spouse--Solicitation of Comment

AGENCY: Office of the Assistant Secretary for Housing-Federal Housing 
Commissioner, HUD.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: On April 25, 2014, the Federal Housing Administration (FHA) 
issued Mortgagee Letter 2014-07, announcing the amendment to HECM 
program regulations and requirements concerning due and payable status 
where there is a Non-Borrowing Spouse at the time of loan closing, 
consistent with the authority to make such changes by the Reverse 
Mortgage Stabilization Act, signed into law on August 9, 2013. The new 
HECM requirements are necessary in order to ensure the financial 
viability of the HECM program and the Mutual Mortgage Insurance Fund 
(Fund), and to comply with the statutory requirement concerning the 
Secretary's fiduciary duty to the Fund. The new HECM requirements will 
take effect for case numbers assigned on or after August 4, 2014. This 
notice solicits comment for a period of 30 days on the new requirements 
announced in Mortgagee Letter 2014-07.

DATES: Comment Due Date: June 2, 2014.

ADDRESSES: Interested persons are invited to submit comments regarding 
this notice to the Regulations Division, Office of General Counsel, 
Department of Housing and Urban Development, 451 7th Street SW., Room 
10276, Washington, DC 20410-0500. Communications must refer to the 
above docket number and title. There are two methods for submitting 
public comments. All submissions must refer to the above docket number 
and title.
    1. Submission of Comments by Mail. Comments may be submitted by 
mail to the Regulations Division, Office of General Counsel, Department 
of Housing and Urban Development, 451 7th Street SW., Room 10276, 
Washington, DC 20410-0500.
    2. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
www.regulations.gov. HUD strongly encourages commenters to submit 
comments electronically. Electronic submission of comments allows the 
commenter maximum time to prepare and submit a comment, ensures timely 
receipt by HUD, and enables HUD to make them immediately available to 
the public. Comments submitted electronically through the 
www.regulations.gov Web site can be viewed by other commenters and 
interested members of the public. Commenters should follow the 
instructions provided on that site to submit comments electronically.

    Note: To receive consideration as public comments, comments must 
be submitted through one of the two methods specified above. Again, 
all submissions must refer to the docket number and title of the 
notice.

    No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
    Public Inspection of Public Comments. All properly submitted 
comments and communications submitted to HUD will be available for 
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the 
above address. Due to security measures at the HUD Headquarters 
building, an appointment to review the public comments must be 
scheduled in advance by calling the Regulations Division at 202-708-
3055 (this is not a toll-free number). Individuals with speech or 
hearing impairments may

[[Page 25148]]

access this number via TTY by calling the Federal Relay Service at 800-
877-8339. Copies of all comments submitted are available for inspection 
and downloading at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Karin Hill, Senior Advisor, Single 
Family Program Development, Office of Housing, Department of Housing 
and Urban Development, 451 7th Street SW., Room 9280, Washington, DC 
20410-9000, telephone number 202-708-4308. (This is not a toll-free 
number). Hearing or speech impaired individuals may access this number 
via TTY by calling the toll-free Federal Relay Service during business 
hours at 1-800-877-8337.

SUPPLEMENTARY INFORMATION: On August 9, 2013, the President signed into 
law the Reverse Mortgage Stabilization Act of 2013 (Pub. L. 113-29). 
This law gives FHA the authority to establish, by notice or mortgagee 
letter, any additional or alternative requirements that the Secretary, 
in the Secretary's discretion, determines are necessary to improve the 
fiscal safety and soundness of the HECM program authorized by section 
255 of the National Housing Act, which requirements shall take effect 
upon issuance. This law gives FHA the authority to quickly set in place 
changes to improve the fiscal safety and soundness of the HECM program. 
Acting on this authority, on April 25, 2014, FHA issued Mortgagee 
Letter 2014-07.\1\
---------------------------------------------------------------------------

    \1\ The Mortgagee Letter can be found at http://portal.hud.gov/hudportal/documents/huddoc?id=14-07ml.pdf.
---------------------------------------------------------------------------

    Since the inception of the HECM program in 1989, FHA has 
interpreted the mortgage insurance eligibility requirement in 
subsection 255(j) of the National Housing Act (as implemented in its 
regulations) as precluding HECMs from being called due and payable 
until the death of the last surviving mortgagor, or other specified 
conditions. FHA offers a variety of ways for the estate of the deceased 
HECM mortgagor to satisfy the HECM loan obligation, and for many years, 
Non-Borrowing Spouses were able to refinance into new HECMs following 
the death of their mortgagor spouse in order to retain the homes. 
However, FHA recognizes that for some Non-Borrowing Spouses this option 
has become more difficult. In this Mortgagee Letter, FHA advances, 
prospectively only, an alternative interpretation of subsection 255(j) 
which extends the insurance eligibility requirement that precludes loan 
acceleration in new HECMs to both the mortgagor and Non-Borrowing 
Spouse. In most cases, this will obviate the need for a Non-Borrowing 
Spouse to refinance the HECM loan upon the death of the mortgagor. The 
specific changes to, and new requirements of, the HECM program are 
detailed in Mortgagee Letter 2014-07.
    Although this extension of mortgage insurance eligibility 
requirements will be part of FHA's upcoming proposed rule on HECM, FHA 
solicits comment in advance of the proposed rule. Comments submitted in 
response to this solicitation will be taken into consideration in the 
development of the proposed rule.

    Dated: April 28, 2014.
Carol J. Galante,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 2014-10102 Filed 5-1-14; 8:45 am]
BILLING CODE 4210-67-P