A description of these important limitations upon the refinancing of such HECM Single Disbursement Lump Sum Payment Option Loans and related anti-churning restrictions, and the Values and Rules of the NRMLA Code of Ethics that prompt and support the issuance by the Committee of this Ethics Advisory Opinion 2013-03, follows, below. The NRMLA Code of Ethics embraces certain Values and requires conformity to certain Rules that embody those Values. Among those Values are Fairness (NRMLA Members shall treat consumers in a manner that is fair and reasonable and as they would want to be treated), Integrity (NRMLA Members shall disclose to consumers potential conflicts of interest) and Professionalism (NRMLA Members conduct shall reflect positively on NRMLA, the profession and the industry). Among those Rules are Rule 105 (NRMLA Members shall not knowingly make misleading statements to consumers or others), Rule 107 (NMRLA Members shall describe to consumers the full range of products and products that may provide a bona fide advantage to such consumers), Rule 301 (NRMLA Members accurately shall describe both the costs and benefits of products presented to consumers), and Rule 605 (NRMLA Members shall comply with all applicable regulatory requirements). The Committee, in reliance upon these Values and Rules, among others, previously has addressed HECM loan refinancing and anti-churning practices. For example, on September 30, 2010, the Committee issued Ethics Advisory Opinion 2010-1 (Ethical HECM-to-HECM Refinancing and AntiChurning Practices) in conjunction with the establishment by HUD, through Mortgagee Letter 2010-34, of another then new (and, as announced in Mortgagee Letter 2013-27, now discontinued) HECM loan option, the HECM Saver. And, more recently, on July 10, 2013, through its issuance of Ethics Advisory Opinion 2013-2, the Committee addressed the related practice of planned repayments of full draw HECM loans. Through this Ethics Advisory Opinion 2013-03, the Committee, also in reliance upon these Values and Rules and the NRMLA Code of Ethics, addresses similar concern that arises as a result of the establishment by HUD through Mortgagee Letter 2013-27 of the HECM Single Disbursement Lump Sum Payment Option Loan. It is the view of the Committee that the Code of Ethics and its Values and Rules do not permit NRMLA Members to advise consumers, directly or indirectly, to plan to refinance HECM Single Disbursement Lump Sum Payment Option Loans into other HECM loans for such consumers within the twelve month period following the closing of such initial HECM loans, and that, as a result, and in addition, NRMLA Members may not directly or indirectly refinance or assist the refinancing of such loans into other HECM loans within such period. It is the view of the Committee that planned refinances of HECM Single Disbursement Lump Sum Payment Option Loans into other HECM loans within the twelve month period following the closing of such initial HECM loans may circumvent (contrary to the requirements of Rule 605, among others) the disbursement limitations applicable to such loans that are described in Mortgagee Letter 2013-27--as further illustrated in the example that follows. 59
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