The Dept. of Housing and Urban Development recently introduced a revised HUD-1 settlement Stmnt for FHA Reverse Mortgages. According to HUD the wording has been changed to include new statutory authority to penelize for false certifications or fraudulant activities and new language for sellers of a HECM for purchase transactions.
On the day of closing the HECM mortgagor must certify the source of cash used for the investment or that the closing costs were not paid by the seller or any other person that will financially benefit from this transaction. Also the seller must certify the HECM mortgagor will not be reimbursed for the closing costs before, during or after the closing.
This new rule applies to HECM cases applied on or after 12-1-10.
For more information on these new rules click on link below
Lisa Scanlon, CSA