The Department of Housing and Urban Development (HUD) has selected Reverse Mortgage Solutions Inc.'s (RMS) core servicing system – Servicing Technology on Reverse Mortgages (STORM) – to fulfill HUD's Home Equity Conversion Mortgage (HECM) service provider contract.
STORM will replace the existing Insurance Accounting Collection Systems (IACS) that HUD and the Federal Housing Administration (FHA) use to collect financial data unique to the reverse mortgage/HECM program. RMS' system supports the full HECM lifecycle and other HECM accounting functions, according to Kevin Gherardi, the company's chief information officer.
IACS was established in 1989 as a prototype for the then-pilot HECM program. The system has been used since by HUD to collect the initial mortgage insurance premiums (MIPs) and the monthly mortgage insurance premium. With the HECM program, FHA provides mortgage insurance to lenders, protecting them against losses resulting from non-payment in-full of the loans. If a loss due to non-payment occurs, the lender files a claim to FHA for insurance benefits.Â
HUD drafts the insurance premiums electronically, based on the servicer-entered loan balance information contained in IACS, "so it's extremely critical to both HUD and the servicer to maintain maximum accuracy in the system to ensure proper payment of the MIPs and also proper payment of claims," adds Gherardi, who says the new standardized online HECM calculators "will ease line-of-credit verification and change-of-loan payment plans."
The winning bid from RMS had support from a team of four specialized partners, including QSSI, Gaithersburg, Md., which specializes in developing and implementing enterprise solutions; Tampa-based CoTs, which provides hosting and help desk services service to government agencies; Falls Church, Va.-based GTBS, a nationwide provider of professional services with a primary focus of supporting nonprofits, federal and local governments; and Washington, D.C.-based Walker & Co., an accounting and auditing practice.
SOURCE: Reverse Mortgage Solutions Inc.