NRMLA ETHICS ADVISORY OPINION 2013- 04 ETHICAL CONSIDERATIONS AFFECTING HECM LOAN MIP PREMIUM DECISIONS October 17, 2013 The Ethics and Standards Committee (the "Committee") of the National Reverse Mortgage Lenders Association ("NRMLA"), the trade association of the reverse mortgage lending industry, enforces the NRMLA Code of Ethics and Responsibility (the "Code of Ethics"). All NRMLA Members are required to comply with the Code of Ethics as a condition of their continued membership in NRMLA. If the Committee determines that a NRMLA Member has not complied with the Code of Ethics, sanctions may be imposed, up to and including the termination of NRMLA Membership. Committee decisions enforcing the Code of Ethics may be made public. The Committee also interprets the Code of Ethics, and, from time to time, proposes changes to it for consideration and approval by the NRMLA Board of Directors. On September 3, 2013, HUD published Mortgagee Letter 2013-27 (Changes to HECM Program Requirements). Under its authority, and effective September 30, 2013, consumers seeking HECM reverse mortgage loans may have an election to make with respect to the amount of the Initial Disbursement at closing and during the First 12-Month Disbursement Period (referred to in this Ethics Advisory Opinion 2013-4 as the consumer’s “Disbursement Amount Election”). And, under this Mortgagee Letter 2013-27, the Disbursement Amount Election can affect the amount of initial mortgage insurance premium (Initial MIP) the consumer is required to pay to HUD. This Ethics Advisory Opinion 2013-4 establishes certain ethical requirements under the Code of Ethics to which NRMLA Members must adhere as they describe to consumers the HECM loan Initial MIP costs associated with their Disbursement Amount Elections. The Code of Ethics establishes Values that convey the ethical and professional principles that NRMLA Members are expected to portray in all business and professional interactions. The Code of Ethics also establishes Rules that address the guidelines and standards of ethical and provisional behavior applicable to NRMLA Members and to which they are required to adhere. One of those Values under the Code of Ethics is Fairness. It requires that NRMLA Members treat consumers in a manner that is fair and reasonable, as they would want to be treated. One of the Rules related to the Value of Fairness requires that NRMLA Members provide consumers with products and services that may provide a “bona fide advantage” to consumers (Rule 107). 62
RkJQdWJsaXNoZXIy MjQ1MzY1