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a. Servicing in Compliance with Law (04/29/2024)
i. Definitions
The Mortgage Holder (Holder) is the entity who holds title to the FHA-insured HECM and has the right to enforce the mortgage agreement.
The Mortgage Servicer (Servicer) refers to the entity responsible for performing servicing actions on FHA-insured HECMs on its own behalf or on behalf of or at the direction of another FHA-approved Mortgagee.
ii. Standard
Holders must ensure all FHA-insured HECMs are serviced by a Servicer in accordance with FHA requirements and all applicable laws.
Servicers must service all FHA-insured HECMs in accordance with FHA requirements and all applicable laws.
(A) Laws Applicable to Mortgage Servicing
Mortgagees must comply with all laws, rules, and requirements applicable to mortgage servicing, including requirements under the purview of the Consumer Financial Protection Bureau (CFPB), the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA), as may be made applicable to HECMs.
FHA requirements that are more stringent or restrictive than those provided for in applicable law are set forth in this Handbook 4000.1 and the Mortgagee must comply with these requirements.
(B) Contract Terms
The Mortgagee must comply with the HECM contract terms unless doing so would result in violation of a more stringent or restrictive statute.
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III. SERVICING AND LOSS MITIGATION B. Title II Insured Housing Programs Reverse Mortgages
1. Servicing of FHA-Insured HECMs
(C) Nondiscrimination Policy
Mortgagees must comply with all antidiscrimination laws, rules, and requirements applicable to servicing FHA-insured HECMs, including full compliance with the applicable requirements of:
• the Fair Housing Act, 42 U.S.C. §§ 3601–3619;
• the Fair Credit Reporting Act, 15 U.S.C. § 1681‒1681x; and
• the Equal Credit Opportunity Act (ECOA), 15 U.S.C. §§ 1691‒1691f.
The Mortgagee must make a financial assessment in a uniform matter that shall not discriminate due to race, color, religion, sex, national origin, familial status, disability, marital status, source of income of the Borrower, or location of the Property, or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act (15 U.S.C. § 1601 et. seq).