In Reverse Halfway Through 2022 and Still Much to Do By Thomas A. Barstow THIS YEAR IS half over, but the issues swirling around the reverse mortgage industry keep churning along. From higher inflation and rising interest rates to new government regulations, much still needs to be done to keep track of the changes and adjust as new challenges arise. And that is precisely what the team at NRMLA has been doing on your behalf, including a thorough review of the planned update of the HECM Handbook by the federal Department of Housing and Urban Development (HUD). All of that and more are highlighted in this edition of Reverse Mortgage. The cover story offers a look at equity release opportunities in Europe, where NRMLA’s counterparts are fighting similar headwinds, as well as more directly feeling the war between Russia and Ukraine. The leader of the European Pensions and Property Asset Release Group (EPPARG) says that interest in equity release products increased during the pandemic, with citizens there facing lockdowns and uncertainty similar to what we faced in the U.S. That situation offers a keen example of what we all know to be a truth that is a core principle of our industry: The home provides the best security for people in tough times, particularly those who are older and more vulnerable. At EPPARG and elsewhere, the intent is to continue to share lessons with their U.S. counterparts, so equity release products increasingly are accepted worldwide and investments flow more freely across borders. “Many countries around the world are facing the same challenge of how to make provisions for their elderly populations at a time when national budgets are coming under increasing pressure, which has become all the more pronounced in the light of the COVID-19 pandemic, and now market turbulence in view of the Russia/ Ukraine conflict,” Steve Kyle, EPPARG’s secretary- general, says in the article, Equity Release Expands in Europe (p. 20). “We have a great deal to learn from each other at the international level in terms of how to foster and grow safe markets for reverse mortgages and other equity release solutions.” As far as the headwinds here, the article Adjusting to Higher Interest Rates (p. 24) looks at how rising rates have been impacting the reverse mortgage market. Higher rates mean lower proceeds for HECM borrowers and slowing HECM-to-HECM refinancings, several observers point out in the article. This environment also means that private-label reverse mortgages might have more appeal, as well as the HECM for Purchase. Writer Joel Berg lays out the various scenarios in his discussions with experts. Meanwhile, the appraisal industry is being proactive with a federal report released in March that will work toward eliminating bias in the appraisal industry and create a fairer playing field for all citizens, especially those who live in minority neighborhoods. The Interagency Task Force on Property Appraisal and Valuation Equity (PAVE) was created after an executive order issued last year by President Joe Biden. The task force’s roadmap includes recommendations along numerous avenues to ensure that appraisals are as objective as possible. In Reverse continued on page 4 REVERSE MORTGAGE / JULY-AUGUST 2022 3
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