FHA issued Mortgagee Letter 2019-15, updating Home Equity Conversion Mortgage (HECM) requirements with respect to Mortgagee Optional Election (MOE) assignments. A MOE assignment allows a mortgagee, in circumstances involving a surviving non-borrowing spouse meeting certain eligibility criteria, to assign the HECM to FHA (in lieu of foreclosure). Per the Mortgagee Letter, FHA:
- Eliminated the interim MOE assignment election and assessment deadlines, along with associated notification requirements;
- Eliminated the 120-day timeframe for bringing current all property charges on HECM loans subject to pre-existing loss mitigation repayment plans;
- Established a 180-day “reasonable diligence” timeframe to initiate an MOE Assignment;
- Eliminated the requirement for an eligible surviving non-borrowing spouse to obtain good and marketable title to the property (that secured the HECM) or demonstrate the legal right to reside in the property for life, and modified related certification and assignment criteria; and
- Updated the definition of an eligible non-borrowing spouse.
In addition, FHA now requires mortgagees to request certain information from borrowers for purposes of identifying a non-borrowing spouse.
The updated requirements apply to all HECMs with case numbers assigned prior to August 4, 2014.
