On Aug. 1, use of a revised reverse mortgage application became required by the Department of Housing and Urban Development.
HUD first announced the revised form, known as Fannie Mae Form 1009, in a mortgagee letter issued in March. In addition, the Federal Housing Administration will no longer allow originators to use the Uniform Residential Loan Application, also known as Fannie Mae Form 1003/Freddie Mac Form 65 for Home Equity Conversion Mortgages.
Section I of the revised 1009 has data fields for HECM for Purchase loans, sales contract price, land installment contract price, borrower's investment, purpose of the loan, index type and loan origination fee. The changes to Section II created fields for both revocable and irrevocable trusts.
The section on liens against the property now provides some examples of what HUD considers to be those types of liens.
There are three new questions in the declarations section of the revised 1009: "Were you required to bring money to closing (and a follow up asking if it had to be borrowed)?" "Do you intend to use the reverse mortgage to purchase or invest in financial products such as insurance, mutual funds or annuities (and a follow up asking the applicant to list those)?" and "Do you have an existing FHA insured loan (with a follow up asking for more details)?"
The mortgagee letter also lists revisions to the model HECM Loan Agreement. It also said every HECM transaction will continue to required completion of the HUD/VA Addendum to Uniform Residential Loan Application, Form 92900-A.
