HECM and the National Servicing Center
The potential closure of the HUD field office in Tulsa, Oklahoma, which houses HECM-specific functions of HUD’s National Servicing Center (NSC), has significant impacts on the HECM program. Bloomberg reports that the NSC, crucial to the work of the HECM program, may have its functions relocated to a different field office in Texas.
According to 2019 congressional testimony from the Government Accountability Office (GAO), the NSC handled 105,000 HECM-related servicing inquiries from 2015 to 2018. NSC staff have been involved in HECM program policy work, including the administration of insurance claims and interest rate calculations.
Bloomberg notes that specialized work, such as the FHA’s HECM program, is conducted at specific HUD offices like the one in Tulsa. If the Tulsa office closes, key staff for the HECM program may need to relocate to a field office nearly five hours away in Fort Worth, Texas.
HUD’s website indicates that general NSC inquiries are directed to an address in Oklahoma City, while all HECM-related functions are based in Tulsa. The NSC aims to assist FHA homeowners and lenders in avoiding foreclosure, providing guidance and training to mortgage lenders and housing counseling agencies.
Federal requirements for field offices
The American Federation of Government Employees (AFGE) National Council 222, representing over 5,000 HUD workers, argues that the closure of multiple field offices would violate federal law. The U.S. Code mandates that the Secretary maintain at least one office in each state for processing mortgage insurance.
HUD spokesperson mentioned that no final decisions have been made, but the department is considering consolidation while prioritizing service. HousingWire’s Reverse Mortgage Daily received confirmation from HUD that the HECM program will continue as a mission-critical function.
Industry response, Urban report
NRMLA President Steve Irwin stated that the association is in touch with relevant staffers to determine the future of HECM insurance endorsements amid potential office closures. A recent report from the Urban Institute highlighted the negative impacts of severe cuts at FHA on mortgage borrowers and the industry, emphasizing the importance of maintaining well-staffed HECM program functions.
The report warned that staff cuts at the FHA’s National Servicing Center could lead to a decrease in FHA lending efficiency. It stressed the labor-intensive nature of the HECM program, which provides essential support to senior homeowners for maintenance, repairs, and general living expenses while allowing them to remain in their homes.