WHEN REVERSE MORTGAGE originators at New American Funding learned a borrower was drawing a subsidy from the state of Washington, they quickly adjusted the loan terms to avoid jeopardizing the senior’s existing benefits. Their goal was to ensure that the subsidy would continue even after the reverse mortgage closed, according to Ellen Skaggs, CRMP, national reverse mortgage sales manager for New American Funding. “Knowing what a senior already has as far as these benefits is important so you don’t jeopardize them,” Skaggs says. In many cases, the benefits are flowing as a result of a landmark law passed in 1965, the Older Americans Act. It is a law that reverse mortgage lenders should know, Skaggs and others say. The law’s provisions reflect an interest in keeping seniors independent and living in their own homes, a mission shared by the reverse mortgage industry. The law paved the way, for example, for the creation of local senior centers and the Meals on Wheels program, which delivers hot meals to homebound seniors nationwide. “It’s an act of enormous consequence and will only continue to grow in importance over the next few decades,” says Scott Norman, vice president of field retail and industry relations for Finance of America Reverse. In some respects, the Older Americans Act cleared a path for the introduction of reverse mortgages, Norman says. “It recognized the idea, even back then, of how expensive it can be to grow older in America. People are going to age somewhere. We know that a reverse mortgage can provide a viable option for those who want to stay in their homes, access extra capital to pay their bills and thrive in their retirement years.” How It Began U.S. seniors began benefiting from the Social Security program in the 1930s. After World War II, though, policymakers decided more was needed to help the growing ranks of aging Americans. A key step came in 1950 when President Harry Truman convened the first National Conference on Aging, which led to calls for a greater government role in addressing the needs of the elderly. In 1956, President Dwight Eisenhower established the Federal Council on Aging to coordinate the government’s activities in the field. A push for legislation and greater funding followed. The Medicare program was one result. Enacted in 1965 and repeatedly tweaked over the ensuing decades, the program provides healthcare to people over 65 and people with disabilities. Signed into law by President Lyndon Johnson in the same year, the Older Americans Act is Medicare’s lesser-known cousin. Instead of delivering healthcare, the law is focused on providing social services and programs in areas, such as nutrition, transportation, employment and caregiver support. It also contains provisions addressing elder abuse. The law’s services are generally for people over 60 with a focus on those with the greatest economic need. Understanding the Older Americans Act Experts: Loan Officers Should Know How Act Affects Clients By Joel Berg Scott Norman 20 REVERSE MORTGAGE / MAY- JUNE 2022
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