HUD-92901 HECM Anti Churning Disclosure

Home Equity Conversion U.S. Department of Housing
and Urban Development
Mortgage (HECM)
Anti-Churning Disclosure
Office of Housing

OMB Approval No 2502-0546

(expires 06/30/2004)

NOTICE TO THE BORROWER
In accordance with Section 255 of the National Housing Act, lenders must provide homeowners
seeking to refinance a HECM with information on the total cost of the new mortgage, based on
the projected total future loan balance. The lender must disclose all fees and charges associated
with the refinance of the HECM, provide the borrower with the new maximum mortgage limit,
and estimate the new funding that will be available to the borrower.
This disclosure is designed to prevent “churning,” an irresponsible lending practice whereby
lenders engage in multiple refinancing to generate additional profit from loan fees and charges.
The "churned" mortgages are not made in the interest of the borrower and provide no financial
benefit to the borrower.
To ensure that lenders do not encourage HECM borrowers who would not benefit from
refinancing their existing HECM mortgage to pursue this type of transaction, the Federal
Housing Administration (FHA) requires that lenders provide HECM borrowers with their best
estimate of:
1. The total cost of the
refinancing to the mortgagor.
2. The increase in the
mortgagor’s principal limit, as
measured by the estimated
initial principal limit on the
mortgage to be insured less the
current principal limit on the
HECM that is being refinanced.

Mortgagee to input: $ amount
of the total of the upfront MIP
plus other closing cost plus
servicing set-aside.
Mortgagee to input: $ amount
of new principal limit minus the
$ amount of the existing HECM
principal limit.

$

$

In addition the mortgagee shall provide their best estimate of funds available to the borrower
minus any closing costs or other fees. It is the dollar amount of the new principal limit minus
total dollar amount from block #1 above minus payoff amount for the HECM that is to be
refinanced. $__________________________________.
Any FHA approved lenders found to be engaged in mortgage “churning” will be subject to
administrative action by the Mortgagee Review Board in accordance with 24 CFR Part 25.
FHA Case Number: ____________________________
Subject Property Address: _____________________________________________________
Lender’s Signature: ________________________________ Date: ____________________
I, the borrower, have been provided with the lender’s best estimate of the total cost of refinancing my HECM
mortgage and the new principal limit. I understand the amount of new funding that will be available to me after
I have paid closing costs and other fees to obtain this new loan.

Borrower Name(s): (print or type)_______________________________________________
Borrower Name(s): (print or type)_______________________________________________
Borrower’s Signature: ________________________________ Date: _____________
Borrower’s Signature: ________________________________ Date: _____________

form HUD-92901
(04/2004)