“I share your view that much needs to be done to inundate media with positive real life stories about our products and how seniors have been helped.”

A loan officer I know recently ran a test study on an article posting site by posting informative articles about reverse mortgages and a positive story of how a senior was helped by a reverse mortgage. She ran the stories on the article posting site for a multitude of reasons, among which the fact that they provided tracking for how often a particular article got hits. The least hit upon article? The positive story about how a reverse mortgage helped a senior.

We may be victims of our own media hype. If our industry does a media campaign of positive stories, we should be aware that many readers and watchers will view the stories as just more of the same advertisements they have seen in the past.

The one exception I have seen recently was Mr. Smalldone's newspaper coverage. Apparently, unless there is a major drama attached to the story, i.e. a stopped foreclosure, there is no coverage. Reporters know what plays in Peoria.

So, while I agree with Mr. Veale and the others in our industry who call for positive stories, we can put them out all day long — but first we need to figure out how to get people to look at them and listen.

While appreciating your compliments, I also know my own limitations. I respectfully defer to the leadership in our industry as embodied in NRMLA and the MBA in matters of this nature. My employer is a member of both.

Beyond knowing the financial situation within the industry it is even more important to have a pragmatic political view. Some believe that a key person behind the home appreciation rate used in the budget calculation might have been one Senator to whom the President owes much in regard to his nomination. No doubt there is some element of truth in that view.

It was somewhat disconcerting to hear last week that the Senator has corralled a long-time friend to our industry, an influential House Committee Chairman, into a meeting where they allegedly will work together to provide more protections to seniors and taxpayers from the perceived abuses of unscrupulous lenders. A few months ago, it seemed highly unlikely these two particular lawmakers would be jointly working on such legislation; now it looks like it is only a matter of time.

I share your view that much needs to be done to inundate media with positive real life stories about our products and how seniors have been helped. We also need accurate analyses of the financial consequences of reverse mortgages presented in articles of the most popular and respected magazines read by financial professionals and attorneys.

Reverse mortgages should be promoted as tools for cash and debt management. Marketing should be developed demonstrating to working baby boomers how reverse mortgages can be used to reduce risk and costs. Old marketing and ads that were developed earlier in this decade whose main messages and motivation are little more than enticements need to end. Our marketing should embrace overall financial responsibility not some irresponsible idea that now you should rely on the house to take vacations, pay the bills, unrealistically improve lifestyles….

Several I hear from share your predictions for the future. A few express even more dire views. Personally I believe in seasons in industry. It could very well be that loan officers experience winter in certain regions of the country for a few years before they enter into spring. Personally I hope we both prove to be overly pessimistic in this regard.

You obviously understand our business the issues that once addressed would go a long way toward helping. Why not take some time, do some creative thinking, brainstorm with other folks with your level of understanding and then present an approach to the issues that might have a real chance of quickly being implemented by regulators. Maybe you and other folks are doing that right now and will announce something big next week. I think something like this needs to be done. I don't have the understanding and political experience you have. I'm sure you know the people (not politicians) to get together with.

We all know that doing the same thing time and time again with the same unsatisfactory results fits the definition of crazy, or whatever. I think we need to try something radical and widespread and well publisized that will attract the attention of a larger audience from the national as well as local political arenas, senior/boomer advocates, leaders in industry outside ours including other senior service providers and the media,and a broad age range of the public.

People need to understand the broader societal good that starts at the funding of a reverse mortgage and how powerful the completion of many more than 100,000 would be.

I think we can put the together to tools for a concerted effort from the above players to do something quickly an thoroughly thought out and not knee jerky so people can begin reading sensational headlines and news stories about reverse mortgages that have a positive bias. If not I think 2010 will be another very tough year that will lead to more ethical and professional people going elsewhere to make a living not to mention leaving thousand of seniors out in the cold.

As James points out, if in fact the program had an overall net profit of $7 Billion according to accepted accounting principles, borrowers should be receiving MIP refunds. I would also agree if this was fact that future MIP premiums should be lowered.

The problem is, how can we trust the figures given out and the calculations used. What I feel we all agree upon is that the HECM program is not this terrible next sub-prime curse that will destroy the mortgage banking industry and bankrupt the agency. On the contrary, the claims and losses on the HECM compared to the traditional FHA product is miniscule. We are bound to see increases in the claims but not in a way that it would compare to the regular FHA program's.

John A. Smaldone