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Mortgage Lending: § 206.302 Establishment of the HECM Counselor Roster.

(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.

Mortgage Lending: § 206.304 Eligibility for placement on the HECM Counselor Roster.

(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;

Mortgage Lending: § 206.306 Removal from the HECM Counselor Roster.

(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;

Mortgage Lending: § 206.308 Continuing education requirements of counselors listed on the HECM Counselor Roster.

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.

Mortgage Lending: Listing of Provisions

Title 24—Housing and Urban Development

Subtitle B—Regulations Relating to Housing and Urban Development

Chapter II—Office of Assistant Secretary for Housing—Federal Housing Commissioner, Department of Housing and Urban Development

Subchapter B—Mortgage and Loan Insurance Programs Under National Housing Act and Other Authorities

Part 214—Housing Counseling Program

Mortgage Lending: 24 C.F.R. § 214.313 Housing counseling fees.

(a) Participating agencies may charge reasonable and customary fees for housing education and counseling services, as long as the cost does not create a financial hardship for the client. An agency’s fee schedule must be posted in a prominent place that is easily viewed by clients, and be available to HUD for review.

(b) Agencies must inform clients of the fee structure in advance of providing services. Clients cannot be charged for client intake.

Mortgage Lending: Introduction and Listing of Provisions

The Consumer Financial Protection Bureau (CFPB) now has authority to issue Regulation Z and its commentary, interpreting the Truth in Lending Act. See Pub. L. No. 111-203, tit. X, §§ 1100A, 1100H, 124 Stat. 2107, 2113 (July 21, 2010). On December 27, 2011, the CFPB issued its version of Regulation Z and its commentary, which is reprinted here. See 76 Fed. Reg. 79,772 (Dec. 22, 2011). The Federal Reserve Board, however, has not withdrawn its version of Regulation Z and related commentary. See 24 C.F.R. part 226.

Mortgage Lending: 12 C.F.R. § 1026.33 Requirements for reverse mortgages.

(a) Definition. For purposes of this subpart, reverse mortgage transaction means a nonrecourse consumer credit obligation in which:

(1) A mortgage, deed of trust, or equivalent consensual security interest securing one or more advances is created in the consumer’s principal dwelling; and

(2) Any principal, interest, or shared appreciation or equity is due and payable (other than in the case of default) only after:

(i) The consumer dies;

Mortgage Lending: Listing of Provisions

Title 12—Banks and Banking

Chapter X—Bureau of Consumer Financial Protection

Part 1026—Truth in Lending (Regulation Z)

Sec.

* * *

Supplement I to Part 1026—Official Interpretations

AUTHORITY: 12 U.S.C. §§ 5512, 5581; 15 U.S.C. §§ 1601 et seq.

SOURCE: 76 Fed. Reg. 44,242 (July 22, 2011); 76 Fed. Reg. 79,772 (Dec. 22, 2011), unless otherwise noted.

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Mortgage Lending: 33(a) Definition

1. Nonrecourse transaction. A nonrecourse reverse mortgage transaction limits the homeowner’s liability to the proceeds of the sale of the home (or any lesser amount specified in the credit obligation). If a transaction structured as a closed-end reverse mortgage transaction allows recourse against the consumer, and the annual percentage rate or the points and fees exceed those specified under § 1026.32(a)(1), the transaction is subject to all the requirements of § 1026.32, including the limitations concerning balloon payments and negative amortization.

Mortgage Lending: 33(c) Projected Total Cost of Credit

33(c)(1) Costs to Consumer

1. Costs and charges to consumer—relation to finance charge. All costs and charges to the consumer that are incurred in a reverse mortgage transaction are included in the projected total cost of credit, and thus in the total annual loan cost rates, whether or not the cost or charge is a finance charge under § 1026.4.

Mortgage Lending: Listing of Provisions

Title 12—Banks and Banking

Chapter 13—National Housing

Subchapter II—Mortgage Insurance

* * *

12 U.S.C. § 1715z-20. Insurance of home equity conversion mortgages for elderly homeowners

Mortgage Lending: Listing of Provisions

Title 15—Commerce and Trade

Chapter 41—Consumer Credit Protection

Subchapter I—Consumer Credit Cost Disclosure

Part B—Credit Transactions

* * *

15 U.S.C. § 1648. Reverse mortgages

Mortgage Lending: Listing of Provisions

Title 24—Housing and Urban Development

Subtitle B—Regulations Relating to Housing And Urban Development

Chapter II—Office of Assistant Secretary for Housing—Federal Housing Commissioner, Department of Housing and Urban Development

Subchapter B—Mortgage and Loan Insurance Programs Under National Housing Act and Other Authorities

Part 206—Home Equity Conversion Mortgage Insurance

Mortgage Lending: § 206.1 Purpose.

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”).

Mortgage Lending: § 206.7 Effect of amendments.

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.

Mortgage Lending: § 206.8 Preemption.

(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.

Mortgage Lending: § 206.9 Eligible mortgagees.

(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.

Mortgage Lending: § 206.13 Disclosure of available HECM program options.

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 Lending: § 206.15 Insurance.

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.

Mortgage Lending: § 206.17 Eligible mortgages: general.

(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)).

Mortgage Lending: § 206.19 Payment options.

(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).

Mortgage Lending: § 206.23 Shared appreciation.

(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.

Mortgage Lending: § 206.25 Calculation of disbursements.

(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: