Jan-Feb2020

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; establish a separate HECM capital reserve ratio and remove HECMs as obligations to the Mutual Mortgage Insurance Fund; and eliminate HECM-to-HECM refinances. The press is talking about ... Four Ways to Pay for Your Parents’ Long-Term Care Catherine Brock, contributor at financial advice website The Motley Fool, explains how life insurance, tax deductions, reverse mortgages or a home equity line of credit can help pay for aging parents long-term care needs. “Any equity your parents have in their home may also be a source of cash—and they won’t have to move,” says Brock. “A reverse mortgage is a loan against the home’s value that is repaid when the homeowner passes.” Reverse mortgages are heavily regulated, adds Brock, and there are rules in place to protect seniors. “For example, the bank cannot force a senior to leave the home or try to collect more than the home’s value. If both of your parents sign on the loan, repayment is delayed until they both pass or move away.” Four Ways to Manage Sequence of Returns Risk To minimize sequence of returns risk—the danger that the timing of withdrawals from a retirement account will have a negative impact on the overall rate of return available to investors—retirement expert Jamie Hopkins recommended four strategies to help retirees, one of which involves tapping home equity. “Tapping into home equity through a line of credit or reverse mortgages during a market downturn can help provide needed cash flow to meet spending needs in retirement in lieu of selling investments during a down year,” says Hopkins in an article for Forbes.com. Other options include lowering annual withdraw rates, creating a “bond ladder” where an individual takes money out of an investment portfolio and purchases bonds that mature over a set number of years, and “bucketing,” which involves “reserving more conservative assets, like cash, for short-term needs, mixed investment portfolios for the next time period and equities for the long term,” according to Hopkins. In Washington, they’re talking about ... President Nominates Montgomery As Next Deputy HUD Secretary President Trump nominated current Assistant Secretary of Housing/FHA Commissioner Brian Montgomery to be the next Deputy Secretary of the U.S. Department of Housing and Urban Development. The Senate Banking Committee held a confirmation hea- ring on Nov. 20 and then approved the nomination by a 20–4 vote on Dec. 10. His confirmation now goes to the full Senate for a separate vote. Commissioner Montgomery cur- rently performs duties of the Deputy Secretary of the Department while also serving as FHA Commissioner. If confirmed by the Senate, Montgomery would be the second most senior offi- cial at HUD, managing the day-to-day operations of the agency and advising and assisting the Secretary in leading the Department’s nearly 8,000 employees. “NRMLA congratulates Commissioner Montgomery on his nomination to be Deputy Secretary,” said Steve Irwin, president of NRMLA. HUD, DOJ Sign False Claims Act Memorandum HUDSecretaryDr. BenCarson andU.S. AttorneyGeneral William Barr issued a Memorandum of Understanding (MOU) between the two agencies that establishes new guid- ance on the appropriate use of the False Claims Act (FCA) for violations committed by FHA mortgagees. The Biz continued from page 9 Brian Montgomery 10 REVERSE MORTGAGE / JANUARY-FEBRUARY 2020