Stabilizing HECM for the Long-Term
During his keynote address, Acting Deputy HUD Secretary/Federal Housing Administration Commissioner Brian Montgomery gave a mostly optimistic account of the improving financial health of the HECM program and MMI fund, but he noted that more structural changes would be needed to further stabilize HECM for the long-term. Commissioner Montgomery said he looks forward to working with NRMLA and the reverse mortgage industry to address these issues and reiterated his support for HECM as a valuable program to help seniors age in place. HUD’s 2019 Annual Report to Congress showed that the economic net worth of the HECM program improved from negative $13.63 billion at the end of FY 2018 to negative $5.92 billion at the end of this past fiscal year – a positive swing of $7.7 billion – but still a negative number. “We’ve seen the improvements over the past year, and we know that it is not enough,” Montgomery said. “It is not self-sustaining, and while the state of the economy is important to the improvement, the time to fix the roof is when the sun is shining.”
Liberty Home Equity Solutions CEO Michael Kent (right) introduced Rob Chrisman, thought leader and publisher of the Daily Mortgage News & Commentary, who delivered a thoughtful presentation on important issues and trends in the mortgage industry.
HECM Staff Priorities in 2020
FHA’s key HECM staff – including senior policy advisor Joshua Miller, PhD; Erica Jessup, Acting Director of the Home Valuation Policy Division in the Office of Single Family Housing; and Kasey Watson, Program Director, Servicing Branch, National Servicing Center – shared HECM program performance statistics and policy priorities for 2020 that included:
- Working with NRMLA and other stakeholders to find a replacement for the LIBOR Index;
- Adding a HECM section to the Single-Family Handbook 4000.1;
- Expanding capacity for HECM default counseling;
- Offering more training opportunities for Mortgagees when policy changes occur;
- Implementing system updates to further automate FHA processes; and
- Enforcing new housing counseling rules. Beginning on August 1, 2020, all HUD-approved HECM counselors must meet new counselor certification requirements, which includes passing the certification examination and working for a participating agency.
Knowing the Rules of the Game
Jim McMinn (left) and Dan Hultquist (right) of Finance of America Reverse ended Tuesday’s program with a fun, interactive, football-themed session to help teach loan officers about certain HECM rules that are often misunderstood. Did you know, for example, that the ability to pay off a reverse mortgage for the lesser of the balance due or 95 percent of the home’s appraised value rule does not apply under circumstances when the borrower’s heirs wish to keep the home and there is no post-death conveyance or transfer of title that would constitute a “sale.” They urged loan officers to make that distinction when meeting with borrowers and their families.
Improving the Counseling Experience
Below from left to right: Mohan Lalwani of ReverseMortgageHelper.org/DebtHelper.com and Justin Lally and Jennifer Cosentini of Cambridge Credit Counseling shared best practices to help counseling sessions go more smoothly. Among the recommendations: lenders that offer portfolio (or non-FHA) reverse mortgages should create a universal counseling certificate that borrowers can use if they pay for multiple counseling sessions to compare products; lenders that offer portfolio reverse mortgages should provide adequate education to counselors in advance of product changes; and loan originators should remind clients a day or two prior to their counseling session to gather the TALC, Amortization Schedule and Loan Comparison ahead of time so that they are not searching for the information at the beginning of the session.
New Board of Directors Elected; Steve Irwin Takes Over as NRMLA President
During NRMLA’s annual business meeting, the membership elected a new Board of Directors for the 2020 term that included:
- Harlan Accola, CRMP, Fairway Independent Mortgage Corporation
- John Button, ReverseVision
- Terry Connealy, Mutual of Omaha Bank
- Jim Cory, CRMP, Open Mortgage, LLC
- Laura Cullen, Longbridge Financial, LLC
- Joe DeMarkey, Reverse Mortgage Funding LLC
- George Downey, CRMP, Harbor Mortgage Solutions, Inc.
- Leslie Flynne, Reverse Mortgage Solutions, Inc.
- Kevin Gherardi, Reverse Technology Group
- Scott Harmes, CRMP, C2 Financial Corporation
- Tim Isgro, Reverse Mortgage Funding LLC
- Reza Jahangiri, American Advisors Group
- Elly Johnson, All Reverse Pro
- Jay Jones, Champion Mortgage/Mr. Cooper
- Michael Kent, Liberty Home Equity Solutions, Inc.
- Rick Lieber, American Advisors Group
- Christopher Mayer, Longbridge Financial, LLC
- Michael McCully, New View Advisors
- Jason McNamara, Celink
- Scott Norman, Finance of America Reverse LLC
- Kristen Sieffert, Finance of America Reverse LLC
- Robert Sivori, Celink
- Patty Wills, CRMP, Open Mortgage, LLC
During the same business meeting, NRMLA President and CEO Peter Bell announced that he was relinquishing his role of president and formally handing over day-to-day management of NRMLA to long-time executive vice president Steve Irwin.