Testifying before the House Financial Services Committee this week, Secretary of Housing and Urban Development Dr. Ben Carson said financial volatility within the HECM program remains a constant challenge, but his agency has proposed several key reforms to “ensure the product remains a viable option for America’s seniors that desire to ‘age in place.’”
Secretary appeared alongside Secretary of the Treasury Steven Mnuchin and Federal Housing Finance Agency Director Dr. Mark Calabria. Much of the 3.5-hour hearing focused on the administration’s plan to end the conservatorship of Fannie Mae and Freddie Mac and Democrats’ assertions that the reform plan would drive up costs for consumers.
Reverse mortgages were not explicitly discussed, but Secretary Carson noted in his written testimony that the performance of the HECM program remains a key concern “despite changes to the program’s principal limit factors and insurance premiums in 2017, and the implementation of an appraisal inflation risk mitigation policy in 2018, both of which have been directionally positive on the program’s fiscal solvency.”
Under the administration’s Housing Reform Plan, HUD recommends Congress enact legislation to replace the current HECM national loan limit with regional lending limits – a move that NRMLA President and CEO Peter Bell said was “ill-advised” when he testified at a separate hearing on September 25 – establish a separate HECM capital reserve ratio and remove HECMs as obligations to the Mutual Mortgage Insurance Fund; and eliminate HECM-to-HECM refinances.
Watch the hearing on YouTube at https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=404485