Mortgagee Letter


Title: HECM Origination Fee New Limits
Source:   HUD
Date: 11/7/2008

Summary:

Mortgagee Letter 2008-34 sets the terms by which the Housing and Economic Recovery Act of 2008 establishes new limits on the loan origination fee that may be charged for a Federal Housing Administration (FHA) Home Equity Conversion Mortgage (HECM).  For all HECMs where the FHA case number is assigned on or after October 31, 2008, the loan origination fee limit will be the greater of $2,500 or two percent of the maximum claim amount of the mortgage, up to a maximum claim amount (MCA) of $200,000, plus one percent of any portion of the maximum claim amount that is greater than $200,000.  Lenders may accept a
lower origination fee when appropriate.  The total amount of the loan origination fee may not exceed $6,000.  

Effective Date: October 31, 2008