View Rule

This rule would eliminate burdensome requirements related to the Home Equity Conversion Mortgage (HECM) program. One provision requires HUD to publish various items related to HECM loan sales on HUD’s website. Because this language is often sensitive, HUD has recently been waiving this requirement to restrict the availability of the information only to qualified bidders who have successfully completed a prequalification process. Limiting access to the information preserves the integrity of the transaction and minimizing legal and reputational risk to the Department.

This rule would also eliminate a provision that requires various post-sale outcomes and requirements related to the purchased assets.  This language was designed with traditional forward mortgage assets in mind.  Applying the same post-sale restrictions to HECM purchasers as to forward-loan purchasers may not yield proportionate benefits and may in fact create barriers to effective participation by qualified bidders. Additionally, the properties subject to mortgages in the recent and upcoming sales are vacant and lacking a surviving borrower.  Given the nature of these assets, additional post-sale obligations can suppress investor interest and result in materially lower bids while adding little or no borrower protection benefit. Therefore, HUD has been waiving this requirement as well.