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Reverse Mortgage News Roundup
This Week’s Top Reverse Mortgage Stories
1- CFPB Complaints on the Rise- The CFPB has been busy collecting consumer complaints. The Consumer Financial Protection Bureau reports an increase of 172% increase in reverse mortgage-related complaints since 2012. One could guess that much of this is due to increased consumer awareness of whom to report grievances to and how to do so. While the data shows a legitimate spike in HECM-related complaints, questions remain such as differentiating between mere questions and complaints that warrant with 80% not requiring any action. Industry trade groups such as the Mortgage Bankers Association, feel this serves only to mislead the consumers the CFPB is charged with protecting.
2- Stupid? A recent CNBC article said reverse mortgages aren’t for the ’stupid’. CNBC reporter Andrew Osterland opens his column saying “you don’t have to be old, poor, and stupid to get a reverse mortgage’. Perhaps Osterland is implying some ‘stupid’ homeowners fell prey to what he says tarnished the industry’s reputation in the first place- ‘cheesy television ads, unscrupulous brokers, and unwise borrower behavior’. He quotes University Professor and industry advocate Dr John Salter who says ‘The late-night ads are a really bad idea for the industry’. Overall the piece is a positive one citing the merits of the HECM when used wisely.
3-Government Shutdown? If there’s one certainty in life it is the political infighting in Washington, D.C., this time it could lead to a government shutdown. By the time you watch this episode, we should know if Republicans and Democrats were able to negotiate a stop-gap budget that President Trump would sign. If there is an extended shut down HECM endorsements would stop altogether, which would lead to a significant backlog. “FHA does not have the authority to insure additional HECMs during this period due to the statutory cap limiting the number of HECMs under the HECM program,” said a guidance piece issued by HUD during the last shutdown in 2013.
4- 2nd Annual Reverse Mortgage Education Week-Last week was Reverse Mortgage education week, during which the National Reverse Mortgage Lenders Association focuses on educating older adults, financial professionals, real estate agents, and family members about the Home Equity Conversion Mortgage. Topics included tax and insurance defaults, avoiding scams, and the repayment process.
Home Point Financial Hires Steven Sless
For Immediate Release
Media Contact:
Leslie Kiesel
734-256-4456
Home Point Financial Hires Steven J. Sless as Towson, MD Branch Manager
Ann Arbor, Michigan – February 19, 2016 – Home Point Financial Corporation (“Home Point Financial”) announced Steven J. Sless has joined as Branch Manager of their Towson, Maryland branch to focus on the continued expansion of their reverse mortgage channel. Steven will manage the day-to-day operations, hold local events and connect with potential borrowers by expanding on his innovative seminar series.
“Steven brings both management and tactical experience to help expand our footprint quickly. With his successful track record and community roots, he adds an important piece to our growing program.” said Josh Shein, Senior Director – Reverse Lending.
Previous to his new position at Home Point Financial, Mr. Sless was a managing partner at Bayshore Reverse Mortgage and an originator with Maverick Funding’s Reverse Mortgage Network. He brings a wealth of knowledge and has built a reputation as a skilled communicator through public workshops, industry publications and national media spotlights.
“I’m excited to build on the foundation that has been started by bringing in talented and passionate reverse mortgage professionals who share the same vision as Home Point,” Steven added about his new role.
About Home Point Financial Corporation
Home Point Financial is a nationwide mortgage banking business focused on multi-channel residential mortgage origination and servicing. Home Point Financial is a subsidiary of Home Point Capital LP, a financial services holding company founded in 2014 and owned by members of management and by investment funds managed by Stone Point Capital LLC. For further information about Home Point Financial, please visit our website www.homepointfinancial.com.
2013: A Turbulent Year
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A Look Back at a Bumpy 2013
For reverse mortgage professionals 2013 will go down as a bumpy ride. And what a ride it has been. In the last ten years I cannot recall a year with more substantial and industry-changing developments. 2013 was rang in with HUD’s announcement they would be ceasing the problematic Standard Fixed Rate Product. While it helped many borrowers who needed maximum proceeds to payoff existing mortgage balances it also added to FHA’s risk of future insurance payouts from its Mutual Mortgage Insurance (MMI) fund. One look at the amortization chart of a fixed rate loan with the full upfront distribution and it didn’t take a mathematician to figure out substantial risk was baked into the fixed rate loan. Unfortunately generous payouts in loan compensation unduly influenced some originators where a more flexible adjustable rate loan may have been more fitting.
While politicians may be adept at spending money they are also politically astute knowing a faltering FHA Home Equity Conversion Mortgage program required some painful changes lest they incur the wrath of watchful policymakers and voters. HUD asked for and received the authority needed to make program changes witht the passage of the Reverse Mortgage Stabilization Act which led to product consolidation. After eliminating the standard fixed rate in April HUD moved to eliminate the standard adjustable and both saver loan programs altogether in favor of one two-tiered product.
Download video transcript here
For more reverse mortgage news, technology & training visit www.ReverseFocus.com
Smart Planning with HECM60
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Set Yourself Apart as a Reverse Mortgage Planner
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#1 Distribution limits. Your reverse mortgage borrowers with high existing mortgage balances will only be impacted by the lower Principal Limit Factors NOT the Distribution Limit. That’s right. HUD allows for those with mandatory obligations of a mortgage payoff that when combined with closing costs and required set asides to use up to 100% of the gross principal limit. Here’s an example. Harry Homeowner qualifies for a Gross Principal Limit of $200,000 but has a mortgage payoff of $160,000, a repair set aside of $13,000 and closing costs of $5,000. That’s total mandatory obligations of $158,000 or 89% of the Principal Limit. That’s right, we broke through the 60% first year cap. #2 Cash at closing? Yes, it makes sense for those with access to funds to avoid not only the upfront 2.5% FHA Mortgage Insurance Premium but also younger borrowers who want to reduce the lifetime cost of the loan.
The paralysis of analysis
While our full time jobs relate to reverse mortgage lending, origination, management, etc, we may have fallen into a very undesirable part-time job: Analysist. We all suffer from an over abundance of news and information, not to say we don’t need it,
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