HECM Changes Coming This Fall

ePath 100K RM leads

change-pillDespite executive order, more HECM Changes coming this fall

One would think our industry may catch it’s collective breath from the rapid nonstop pace of new rules and regulations for the Home Equity Conversion Mortgage. Such hopes were bolstered with the February announcement of President Trump’s Executive Order curbing federal regulations. However, it appears that HUD’s final rules will in fact be implemented this fall. What do such changes hold in store for the reverse mortgage industry?

Perhaps it is fitting that HUD’s final HECM rule will arrive just days before the fall season officially begins on September 19th. The rollout will come in three phases: self-implementation, changes to the Single Family Housing Policy Handbook, and future mortgagee letters. During the National Reverse Mortgage Lenders Association meeting last week in New York City, the association’s president and CEO Peter Bell expressed their comfort on the direction of the coming rules changes.

Some additional changes are welcomed by industry participants. These include ….

1 comment

The_Cynic April 10, 2017 at 8:05 am

For the last 12 years, many of us have heard whenever there is change in HECMs, proprietary products will soon come to the rescue. Yet that has not happened in the last dozen years SO what makes us think that they will do so now at the start of a LIBOR interest rate indices rising economic market? Worse, the only meaningful competitor to HECMs (Home Keepers) was terminated by Fannie Mae almost 8 and one-half years ago.

Peter’s comment about NRMLA’s comfort with the direction of the new policies seems more an euphemistic statement of capitulation than of full endorsement.

There is an old saying that when you fall off the horse you get up, dust yourself off, take a deep breath, and immediately get back up on the horse to ride again. There was no such effort with the Extreme Summit. While its beginning had great flare and people traveling from here to there to show support, it fell much quicker than it started without admission of failure and a plan as to how we as an industry would move forward. Replacing it is an education week for about one hour a day for one week. BUT is just one week out of 52 really all that meaningful? Was that what the Extreme Summit was to be a one week a year event? Considering what the Extreme Summit was supposed to be and what the education week, the education week even though a nice effort is hardly the same. We could have done better with 12 learn while you lunch sessions.

Downward stagnation continues with no end in sight with minimal commitment from our leaders to corroborate in efforts to overcome it. It was disappointing to see so much effort to gather testimonials showing how the “new” HECM is better suited for financial planning purposes rather putting that same effort in making the Extreme Summit a success. Yet our prior HECM products were far better suited for this purpose and there were already testimonials in years prior to the Extreme Summit showing exactly that. So why waste so much time bickering when the financial planning academicians already involved with the industry were telling us exactly the same thing. If that was a sample of the problems with the Extreme Summit, is it any wonder it collapsed? Aren’t the academicians the experts on the subject, not some in NRMLA with an ax to grind.

I strongly believe in HECMs. Over optimism and expedient exaggeration have accomplished nothing so far. It seems comfort, contentment, and stagnation rule the day. Wasting time to complain about increased changes by our regulators is self defeating. When economics change and our product is in danger of termination by Congress there is a need to roll with the necessary changes and move forward, not sit around complaining how we were just thrown off the horse. Complaining about change sounds like a bunch of educators at a union meeting, not salespeople. But we do need to dust off in recognition that we tried and FAILED and get back up on the horse to overcome that failure. Failure simply shows we are on the road to success. Comfort, contentment, and stagnation show acceptance of the status quo; where that is best seen is at a cemetery.

I for one vote for change.


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