[Federal Register Volume 80, Number 25 (Friday, February 6, 2015)]
[Notices]
[Pages 6743-6744]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-02452]


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

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5735-N-04]


Home Equity Conversion Mortgage (HECM) Program: Mortgagee 
Optional Election Assignment for Home Equity Conversion Mortgages 
(HECMs) With FHA Case Numbers Assigned Prior to August 4, 2014--
Solicitation of Comment

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

ACTION: Notice.

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

SUMMARY: On January 29, 2015, the Federal Housing Administration (FHA) 
issued Mortgagee Letter 2015-03, setting out an alternative path to 
claim payment--the Mortgagee Optional Election Assignment--for certain 
HECMs. FHA issued this Mortgagee Letter pursuant to the authority 
granted to it in the Reverse Mortgage Stabilization Act of 2013 and 
Section 230 of the National Housing Act. This alternative path to claim 
payment is necessary in order to ensure the financial viability of the 
HECM program and the FHA insurance funds. The mortgagee letter was 
issued for immediate effect and only applies to HECMs assigned an FHA 
Case Number prior to August 4, 2014, where there is a Non-Borrowing 
Spouse. This notice solicits comment for a period of 30 days on the 
alternative option for claim payment announced in Mortgagee Letter 
2015-03.

DATES: Comment Due Date: March 9, 2015.

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 access this number via TTY by calling the 
Federal Relay Service at 1-800-877-8339 (this is a toll-free number). 
Copies of all comments submitted are available for inspection and 
downloading at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Ivery Himes, Director, Office of 
Single Family Asset Management, Office of Housing, Department of 
Housing and Urban Development, 451 7th Street SW., Room 9172, 
Washington, DC 20410; telephone number 202-708-1672 (this is not a 
toll-free number). Persons with hearing or speech impairments may 
access this number by calling the Federal Relay Service at 800-877-8339 
(this is a toll-free number).

SUPPLEMENTARY INFORMATION: FHA has a statutory obligation to ensure the 
fiscal soundness of the FHA insurance funds and must take into account 
the financial and administrative burden of any potential alternative to 
claim payment that may be afforded to mortgagees holding any eligible 
HECMs that were assigned FHA Case Numbers prior to August 4, 2014. FHA 
also has the ability, pursuant to the Reverse Mortgage Stabilization 
Act of 2013 (Pub. L. 113-29), to establish, by notice or mortgagee 
letter, any additional or alternative requirements that the

[[Page 6744]]

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.
    FHA provided two alternative paths to claim payment in pending 
litigation: The Hold Election and the Mortgagee Optional Election 
Assignment, which are further discussed in Mortgagee Letter 2015-03.\1\ 
When analyzed in the aggregate, these options are costly; either 
option, even if offered alone, poses a significant financial impact to 
the FHA insurance funds. The Hold Election, when applied to the 
potential universe of mortgages involving Non-Borrowing Spouses of HECM 
borrowers, imposes a financial risk to the insurance funds that is 
simply too great. FHA's obligation to protect the soundness of the 
insurance funds makes it impossible to offer this option broadly. Even 
though the Mortgagee Optional Election Assignment also poses a 
financial risk to the FHA insurance funds, the risk is significantly 
less; therefore, FHA has determined that the only alternative path to 
claim payment that FHA will permit mortgagees to elect, pursuant to 
Mortgagee Letter 2015-03, is the Mortgagee Optional Election 
Assignment.
---------------------------------------------------------------------------

    \1\ Mortgagee Letter 2015-03 is available at http://portal.hud.gov/hudportal/documents/huddoc?id=15-03ml.pdf.
---------------------------------------------------------------------------

    In Mortgagee Letter 2015-03, FHA set out the Mortgagee Optional 
Election Assignment path to claim payment for existing HECMs with FHA 
Case Numbers issued prior to August 4, 2014. FHA alerted mortgagees 
that aside from the present procedures for either the sale of the home 
or foreclosure of the HECM in accordance with the contract as endorsed, 
or the Mortgagee Optional Election Assignment alternative, no other 
path to claim payment exists.
    Comments on the changes announced in Mortgagee Letter 2015-03 will 
be accepted for a period of 30 days and will be considered by HUD.

    Dated: February 3, 2015.
Biniam Gebre,
Acting Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2015-02452 Filed 2-5-15; 8:45 am]
BILLING CODE 4210-67-P