A lender sells from its own menu; HUD’s HECM disclosure provision asked it to explain a wider one. The January 19, 2017 final rule required information about all FHA-insured products, features and options, regardless of which the lender offered. That separates the borrower’s information set from the seller’s inventory, without forcing the seller to provide every product it describes. [2017-01044]

The distinction offers a concrete way to think about comparison shopping. A borrower can be told an option exists even when completing a transaction would require a different provider or further qualification. This is an implication of the disclosure design, not evidence that switching became easier, prices fell or competition increased. The final publication supplied no measured market outcome from the new requirement. [2017-01044]

Price-risk limits were a separate decision. HUD’s May 2016 proposal would have limited annual adjustable HECM movements to one percentage point per adjustment and five points over the loan’s life. It also proposed a five-point lifetime bound for monthly adjustable loans. The January final deferred those changes instead of adopting the proposed package unchanged. [2016-11631][2017-01044]

HUD scheduled September 19, 2017 effectiveness for the final rule. Its discussion also retained the role of existing financial assessments and possible property-charge reserves, so information about an option was not equivalent to approval for it. The market question is whether disclosure changes actual comparisons and choices. These two documents from one HUD proceeding establish the mechanism, not the answer. [2016-11631][2017-01044]

Source documents

  1. Federal Housing Administration: Strengthening the Home Equity Conversion Mortgage Programhttps://www.govinfo.gov/content/pkg/FR-2017-01-19/html/2017-01044.htm
  2. Federal Housing Administration (FHA): Strengthening the Home Equity Conversion Mortgage Programhttps://www.govinfo.gov/content/pkg/FR-2016-05-19/html/2016-11631.htm