While attending the University of Texas on a track and field scholarship, Scott Norman suffered an injury that ended his sports career, but that closed door opened a new one in politics.
To pay for part of his college tuition, Norman worked part-time in both chambers of the Texas legislature. After graduating from college, Norman entered the mortgage business but remained politically active. Beginning in 1999 and on through 2015, he played a crucial role in getting a series of constitutional amendments passed by the Texas legislature and approved by the voting public that legalized reverse mortgages and later HECM for Purchase.
Norman currently co-chairs NRMLA’s Board of Directors—which requires a certain level of political acumen—and chairs the NRMLA State and Local Issues Committee that monitors legislative activity in the state assemblies. He also manages NRMLA’s political action committee (PAC), which raises money from NRMLA members to help finance the campaigns of NRMLA’s most significant political supporters in Congress.
Reverse Mortgage magazine sat down with Norman to better understand what goes on in the state assemblies and how NRMLA members can help by becoming more politically active.
Reverse Mortgage: What got you interested in politics? Was your family politically active? Was it something you picked up in college?
Scott Norman: I would say that my family was politically aware. My aunt’s father was Gov. John Connally, so politics was always mentioned around the dinner table. My father was not a fan of being involved in politics, but he was certainly a believer in being active in politics. I found a greater appreciation for it in college. I went to the University of Texas to run track, but I injured my Achilles tendon. I needed to go to work to help pay for college, and I got a job in the capital, so, I’ve been walking the halls of the (state) Capitol since the early ‘90s.
RM: That’s cool. What kind of job did you get?
SN: I started as a messenger in the Senate and then worked my way up to being a legislative aide in the House, later becoming one of the reading clerks for Speaker Gib Lewis. Eventually, I worked as a legislative aide in the Senate, and, ironically, one of my issues back in 1993 was amending the Texas Constitution to authorize home equity lending. So, in a roundabout way, I’ve been active in the equity lending space since 1993.
RM: Interesting. How did that come about?
SN: Sen. Jerry Patterson advocated home equity lending, but equity lending was very controversial at the time. The Republic of Texas, in part, was founded on unique homestead rights, and there was no home equity lending at all in Texas until 1997. I cut my political teeth— and to some extent my business teeth—on the idea of homestead rights and trying to wage that unique line between what Sam Houston fought for and where Texas needed to be in the future. It was a fascinating time to be walking the halls of the Capitol, because I was learning so much about the mortgage business. Little did I know that I would end up in that same space just a handful of years later.
RM: You played an instrumental role in getting the Texas Constitution amended to allow for reverse mortgages. What motivated you to take on the challenge?
SN: In 1997, reverse mortgages were authorized as part of the original constitutional amendment that allowed for home equity lending. However, there were multiple differences between the way the constitutional amendment was drafted and how existing HUD rules worked. While reverse mortgages were legal in 1997, nobody offered them. Fast forward two years, I was active in the traditional mortgage space. Everyone in the industry, it seemed, was focused on offering home equity loans, and nobody was focused on reverse mortgage lending in the state. The demographics were already changing, so it seemed like reverse mortgages would be a better long-term play than being in the home equity business. I was fortunate to connect with Fannie Mae and a small group of stakeholders who wanted to fix the errors from 1997. Over the next year, we worked with the legislature to amend the Texas Constitution. In the summer of 1999, I founded the Texas Association of Reverse Mortgage Lenders to run that campaign on behalf of Fannie Mae. That was when I got into the business full time. I met (current NRMLA CEO) Peter Bell and (former Financial Freedom CEO) Jim Mahoney in the middle of that campaign, and they are still major influences in my life.
RM: What was the most important thing you learned from that experience?
SN: Two things stick out. First, you need to ask yourself, do you want to be correct or do you want to be effective? The second point, which applies not only to politics but to business in general, is to be inclusive. Bring in more people than needed, and don’t leave anybody out. Involve stakeholders at every end of the spectrum. Everybody’s got a vantage point and expectation of what they’re looking for and what they need from a situation. The more people you bring in early on, the less likely somebody will be surprised and throw a wrench in the setup.
RM: You worked with state Sen. John Carona on a lot of the constitutional amendments. How did that relationship begin?
SN: We were introduced by a mutual friend who thought we had the same goals for the state in mind. Sen. Carona is a great man who clearly understood how the demographics in Texas were changing. He believed in utilizing home equity to maintain and enhance retirement. Additionally, he understood that, if we’re not helping homeowners utilize all their assets and all their resources, the State of Texas was going to eventually find itself in a bad spot where we’re going to be pressed for general resources. As Texas continues to age, he thought that we’re going to need to find different ways to help people not only retire but age in place. He got that early on.
RM: Lawmakers retire or are defeated, so should members continually be looking for new people to advocate for our causes?
SN: Yes, we’re always looking for new people and relationships on a national level who serve in Washington, DC, and at a state level and even, to some extent, a local level. Decisions are made by those who show up, so one of the most important things a member of NRMLA can do is to have a good working relationship with their member of Congress and their state representative or senator. You don’t have to be a giant campaign donor. Be a resource so that they know who to contact when they need information about reverse mortgages. When you look at the average politician, they have a plethora of issues thrown at them daily. There is just no way they can keep up with everything. When they can find constituents, who are willing to explain the benefits of reverse mortgages, it can be invaluable to them and the industry.
RM: As co-chairman of the State and Local Issues Committee, you’re constantly monitoring legislative activity in the state houses. What bills are you keeping an eye on in 2021?
SN: The State & Local Issues Committee is a great committee for somebody who wants to be involved in the association and would like to learn more about the issues that come up before the legislature. This year, we monitored 35 bills in eight states, and I consider that a light year because of COVID. We had a number of significant pieces of legislation in New York we monitored, as well as legislation in Maryland, Oregon and Massachusetts, just to name a few. And we also had two pieces of legislation in Texas, one was a foreclosure bill, and another dealt with false advertising. Serving on the State & Local Issues Committee gives people a unique vantage point about the inner workings of NRMLA and what NRMLA does daily. People are constantly surprised at how much NRMLA does week to week and, frankly, even day to day.
RM: Since the HECM program is already tightly regulated, why do politicians introduce these bills?
SN: I always believe, in part, legislation is filed from the vantage point of wanting to help. Think about how much our industry has changed in the last ten years. It’s unrealistic to think that every member of every legislature will be briefed on these changes, so we tend to see some overlap or mixed policies. Just because a piece of legislation is filed at the state level doesn’t necessarily mean it’s bad for the industry. Sometimes it just takes getting everybody in the same room to talk about the end goal. The democratic process can be something special, and the more people who have a seat at the table, the more we, as an industry, can be educators, and I believe that is a great thing.
RM: You mentioned the advertising bill in Texas. You actually testified at a hearing for that bill. What can you tell our readers about that issue?
SN: We’re still in the middle of discussing that legislation, so I’m hopeful that by the time our members are reading this, we can be talking about a successful legislative session. When I testified, I expressed the importance of protecting senior homeowners from those who might try to mislead a senior in some capacity. The issue behind this bill was that the legislature doesn’t want homeowners to be confused by false or deceptive advertisements, nor have the perception that a reverse mortgage is a government benefit. In the end, we’re talking about good people whose number one asset is their home. Anytime we can talk about reverse mortgages with a member of the legislature, I think that’s good. Since this bill was filed, we’ve worked with a number of legislators and consumer groups to draft what I believe is a really excellent consumer protection bill that benefits everybody in the process.
RM: North America, Europe and Asia all have aging populations, and many governments are looking for private-sector solutions, including home equity extraction options, to address the retirement crisis. Is that a valid talking point to have with lawmakers?
SN: The subject of an ever-aging population is one of the most important issues facing the United States and the world today. The United States is aging at such a rapid pace, the amount of pressure that’s going to be placed on pensions, benefits and resources will be a cataclysmic problem for all of us. Infrastructure, national security and COVID are clearly critical issues of the day, but the aging of America is an issue that will become much bigger before it gets smaller. I applaud the Biden administration for openly discussing the importance of caregivers in our communities. People want to be able to age in place and utilize their own assets and their own resources. How can we protect our most vulnerable population? We are living through a very significant decade, not only for reverse mortgage lending but for the country. We need to figure out the best ways to protect our seniors, Social Security, Medicaid, Medicare. These resources are going to be stretched in ways that we can only imagine right now.
I was reading a report about caregivers and came across two stats that every American should know. Demand for elder care will be driven by a steep rise in the number of Americans living with Alzheimer’s disease, which could more than double in the next 30 years to almost 14 million, from 5.8 million today. And the large share of older adults also means that Social Security and Medicare expenditures will increase from a combined 8.7 percent of the GDP today to 11.8 percent in our lifetime.
RM: I’d like to conduct a brief test. Who is your state representative, and who is your U.S. congressman? Have you met both of them? If you have met them, what do you normally talk about? I hope reverse mortgages come up at some point.
SN: My state representative is Donna Howard. My congressman is Roger Williams, who sits on the Financial Services Committee in the U.S. House of Representatives and is someone who I’ve spoken with several times about reverse mortgages. I’m just trying to be a resource. When I’m in Washington or the Capitol building in Austin, I drop by their offices. I don’t get too caught up in the idea that if you don’t have a deep personal relationship with them, or if you’re not a major contributor to their campaign, it’s not going to matter. They’re looking for people who can give them a basic explanation about reverse mortgages and their benefits. I’m a big believer in an old LBJ quote, “The doers and the builders take up the front line.” If you’re not willing to be engaged, who is? You’re then dependent upon somebody else. NRMLA members can be amazing resources, and I believe they can go a long way to help educate our policymakers.