OK

My advice is to give him time to do his job. hen you start a letter writing campaign to congress, since so many participants in our business have no idea where their representatives stand on various issues, they end up writing to those who are opposed to the program (and perhaps FHA more broadly) simply giving them fuel for their arguments to do away with such programs. More harm may be done by writing to the wrong folks than by simply holding off for the moment.

Thanks

HUD’s leadership seems to be ignoring the purpose for which it was created – to stabilize and revitalize communities; to reduce defaults and preserve neighborhoods. The financial sector, banks & others, which caused the ecomomic collapse, got bailed out and was made whole. But, when it comes to protecting seniors devastated by the economic collapse, HUD is taking a hard line against the senior homeowner. Senior homeowners do not have the luxury of time to recover from these losses. They need cash from the HECM to live out the rest of their lives in their homes.

Congress should order OMB to do a net cost analysis on the MIP fund from inception. In one article, HUD wanted to ignore the accumulated MIP fund and just compare results of the inflows & outflows on an annual basis. In 2008 and 2009 it could be a net outflow, thus supporting the treasury’s justification for rate increases. However, if OMB finds that HUD raided the HECM fund for other purposes or made false statements regarding the MIP fund, the leadership should be censured and replaced.

Owen McKeon
Reverse Mortgage Counselor

I have looked at everyone’s comments so far. Some very good points brought out, I commend all of you. Critic and Peter Bell, your points are well received. In this economic environment I don’t see any other way to safely handle this, except seek a credit subsidy to cover the loss, just as they have proposed it in the administration’s initial budget proposal.

To raise the MIPs, so that more money would come to eliminating the need for a credit subsidy, or to reduce the principal limit factors. could be disastrous to the survival of the HECM program.

Can you imagine a $400,000 home with a 2.5% MIP, $10,000 plus all the other costs? The senior will have no use for a Reverse Mortgage, they will have a Heart attack at the Table and die on us!

The Reverse Mortgage industry can’t hang in there with all these changes that have been made and those proposed. We are going to destroy one the greatest programs that allow are senior home owners to improve their quality of life and maintain their dignity.

We have alternatives, the program can survive, it needs to survive. We need to leave it alone for a while. We need to give it breathing room. To many changes to quick. Many changes being made by people who do not understand the industry. Too much corruption and too much politics. It is sad to see all this is happening right under our noses.

Peter Bell said it well. He said, there are times and places in which the government should step in and subsidize some areas of commerce to keep economic activity rolling. This is one of those times where such action clearly is needed to keep tools such as the HECM functioning smoothly. Very well said sir, very well said.

I wish you all a good night,

John A. Smaldone

Caio