Friday’s Food for Thought: Pandora’s Box

Shannon Hicks August 12, 2011 2

HUD’s now suing Wells Fargo & Fannie Mae for their foreclosing on reverse mortgage borrowers. Did HUD open Pandora’s box with their recent mortgagee letter? It seems the entire house of our industry is undergoing a remodel.

TAGS » HECM, HECM Market, HMBS, HUD, investors, S&P, US credit

POSTED IN » Featured, Friday's Food for Thought, Videos

About the author: Shannon Hicks View all posts by Shannon Hicks

Shannon Hicks - Shannon Hicks is VP of Product Development at Reverse Fortunes, Inc. He draws from his experience as a reverse mortgage originator and prior work in the financial services industry. He has spoke nationally at NRMLA events and is host of Reverse Fortunes Weekly, the nation’s only weekly podcast for reverse mortgage professionals. For more information, call 1.800-805-9328 x 4.

2 Comments »

The_Cynic August 13, 2011 at 10:53 am - Reply

HUD Mortgagee Letter 2008-38 has absolutely nothing to do with this case.

This case is all about a servicer and note owner allegedly acting in bad faith. The underlying mortgage by its very terms allowed the borrower/heirs to pay the lesser of the balance due or 95% of appraised value at time of termination. There is no way under the sun that a Mortgagee Letter can overturn that provision. The respondents are accused of putting their interests above that of the plaintiff.
- admin August 15, 2011 at 7:26 am - Reply
  
  Good points. The servicer and note owners are the ones who made the decision to ultimately begin foreclosure but was HUDs mortgagee letter seen by the plaintiff’s attorneys as back-peddling? Hard to say. This case opens up a plethora of issues that need to be addressed.