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RMD Interviews NRMLA president Peter Bell on Industry Outlook and change
If you want an example of rapid industry change look no further than the Home Equity Conversion Mortgage program.
Recently Reverse Mortgage Daily interviewed Peter Bell, president of the National Reverse Mortgage Lenders Association or NRMLA seeking insight on the recent spate of changes to the HECM program and our industry’sfuture.
First RMD asked- given the Financial Assessment is underway and the non-borrowing spouse issue seems to be getting resolved, how would you classify the footing of the Reverse Mortgage program right now relative to other points in history?
Download a transcript of this episode here.
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4 Comments
Shannon,
It was a great interview and for the most part, I agree with all that Peter said.
One correction is how old the HECM loan has been around, Peter said 20 years. If I am not mistaken it has been in existence for over 35 years, ever since President Reagan signed it into effect and hooked it up with HUD/FHA.
If I am wrong on that assessment, please correct me, I will welcome it. Other than that, again the interview was great and right on target!
John A. Smaldone
John,
You are partially correct. President Regan signed the the National Housing Bill into law in 1988. Section 255 established the HECM demonstration program and it’s regulations, however the program did not become “official” until 1998 when the “HUD Appropriations Act” funded the program.
John and Alfie,
35 years ago was 1979 when Carter was President. The HECM program was not yet presented into any bill in Congress by the end of 1979.
The HECM lender insurance program was signed into law by President Reagan but implemented by HUD during the GHW Bush Administration over 25 years ago.
Per HUD the first HECM was endorsed in fiscal 1990.
Let us step back and look at major things that have gone awry in our industry in just the last two years. Is it all about financial assessment or non-borrowing spouses? Extremely doubtful.
Since August 4, 2014, we have had a very clear policy on non-borrowing spouses with one reasonable and relevant refinement. By the start of this fiscal year few originators should have had any major questions about which rules apply or how they apply to new originations. As to financial assessment the implementation delays have made it so that just one month of this fiscal year will see any significant negative impact to endorsements from this change.
So why are endorsements barely above the level of the worst fiscal year for endorsements in nine years, fiscal 2014? Home prices are up and have not significantly dipped at any time in this decade (except for natural disasters which is normal in all housing markets). There are now over 20 million Baby Boomers who are over 62. Senior home equity is up and growing.
Until we can quit hiding it and do not do what is needed, a thorough analysis of its failure, the failure of the Extreme Summit, specifically its marketing failure will haunt us for years. Its TV ads and proving that the current HECM is new did absolutely nothing to increase endorsements which was its chief objective as stated many times in industry publications.
Even the NCAA is revamping its failed bracketing system next year. Is it not about time to address one of the biggest industry marketing failures of a small industry in years? So far all we have seen are attacks and requests to pile on when anyone questioned components of the Extreme Summit.
Yes, it is my contention that endorsement numbers are down in part because of the distraction, the costs, and the loss of time that the Extreme Summit generated. If that time, cost, and efforts had been placed into lender marketing, we probably would have had much better endorsement results last fiscal year as well as this one.