AARP Showing More Support for Reverse Mortgage Industry
November 17th, 2009 | by admin Published in Counseling, NRMLA, News, Reverse Mortgage | 14 Comments
Over the past few weeks I’ve been seeing hearing from more people about their frustration with AARP and their support (or lack there of) for reverse mortgages.
Whether or not you like AARP, the organization has been supportive of the program and the industry. For example, while most people are quick to say that AARP has done nothing to stop legislators from lowering the principal limits for reverse mortgages, it’s just not true.
Below is a letter which showing that AARP was involved in trying to get Congress to provide the full $798 million requested by the Obama administration for the Home Equity Conversion Mortgage (HECM) program.
Like the majority of the industry, AARP felt that the Congressional Budget Office’s budget assumptions for the HECM program were overly conservative and the $798 subsidy isn’t necessary to maintain the soundness of the HECM program.
If you read the entire letter it’s clear that AARP is very supportive of the program and is working alongside the National Reverse Mortgage Lenders Association to reach out to Congress. What the letter doesn’t show is the other work which has gone on behind the scenes by NRMLA and AARP.
Lets also not forget about AARP’s recent 30 minute segment on the product which was very fair and informative. As we all know, it’s easy for media outlets to take the negatives and run with it but AARP decided not to and did a service to its viewers and our industry by doing so.
However, none of what I’m saying here means that AARP might not have some sort of ulterior motive. It’s no secret that AARP makes a significant amount of money from working along side companies to promote products/services and its not clear whether or not they plan on doing this with reverse mortgages.
What’s clear is that AARP is supporting the development of the reverse mortgage industry and its E-Street feature and this letter are proof. So please stop with the emails bashing AARP.
- Related Posts
- AARP Pushing For 625K HECM Loan Limit?
- Obama Administration Requests $798 Million To Aid Reverse Mortgage Program
- Journalist Calls Out McCaskill on Her Reverse Mortgage Crusade
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November 17th, 2009 at 4:05 pm (#)
Thank you AARP, I for one stand corrected.
November 17th, 2009 at 8:57 pm (#)
AARP is a strong proponent of the product. It is astounding all of the attacks members of our industry have thrown at AARP in this regard.
AARP is not a strong proponent of our fee structure. It would have been nice if it had lobbied for our fee structure to be capped at where they were before the passage of HERA.
AARP cried out for lowering our fees because they predicted that the volume of our business would be much greater with all of the things HERA gave us and supposedly we did not deserve such high volume at the existing fee structure. It has been over a year since the passage of HERA and in that time the rate of growth in my neck of the woods has diminished. With less volume and a cap that is 18% lower, AARP may be a friend of the product but not necessarily of lenders or more particularly, originators. Are they arguing reinstatement? Well not exactly.
November 18th, 2009 at 7:04 am (#)
Admin must have got his marching orders from Peter Bell at NRMLA to say
something about AARP “bashing”. I really beginning to think this web site has a slanted political adjenda, and it isn't that of being a forum of independent thought where all ideas and opinions are welcome. For your information, Admin, there are millions of American Seniors who sincerely question AARP's motives and what the organization does with its money.
$10.00 times 30 million is a lot of membership revenue; who really knows how much the group makes from its product and company affilations.
Frankly, instead of spending so much money to lobby Congress and operate the organization, I would like them to take a hundred million dollars two years in a row to create a fund to repair Seniors homes, when the
FHA HECM formula will not allow enough money to repair a Senior's house,
necessary to satisfy issues after an FHA appraisal. Or how about some program to help Seniors whose home values have been devastated by
something in large part they had nothing to do with–the subprime catastrophe.
November 18th, 2009 at 8:43 am (#)
jamesanelson,
AARP is a collection of several entities. One is AARP which is a tax-exempt civic origination; that is the organization where the dues go. Then there is the AARP Foundation which is a charitable organization. Between charitable giving and government funding the AARP Foundation got over $140 million in gross receipts during 2007 per their publicly filed documents. AARP has other organizations which are taxable. But I am no expert on AARP and how it operates.
Your suggestion is a great one. You should turn your efforts and those of others to getting AARP to look at the plight of seniors. I volunteer at AARP but my voice is lost in the pleas of tens of thousands of other causes. The more who are involved, the better but it takes time, energy, and it is very, very competitive. After all money is invoved and there are lots and lots of legitimate (and phoney) needs out there..
At one point, there was a report which stated AARP annual income from all sources exceeded $1.3 billion annually. How accurate that story was, i have no idea. The point is your idea should be explored and considered by AARP. Go for it.
November 18th, 2009 at 9:00 am (#)
Only 3 weeks ago, ADMIN wrote these comments:
While the origination fees are capped at $6,000, it’s only one part of the total cost which can total as much as 10% of a home’s value, says David Certner of AARP. advocacy group for older people. It’s comments like this from AARP that bother me. Even though AARP was supposedly a big supporter of the changes included in HERA, it’s clear people in their organization still aren’t behind the product.
AARP should stop criticizing reverse mortgages unless they start providing alternatives they’ve “deemed” worthy.
3 weeks later, what has changed??
November 18th, 2009 at 9:07 am (#)
4bees,
You bring up a good point, but they said that over a year ago
http://reversemortgagedaily.com/2008/10/29/wall...
I've never been a big fan of David Certner's comments and I'm still not, but after what I've seen them do recently I do think they're behind the product.
November 18th, 2009 at 9:20 am (#)
Yes, it would be great to see the breakdown of not only AARP's funds, but to see what NRMLA does with their money. I'd have to say that it almost seems like AARP is more of an advocate for Reverses than NRMLA is! One of the two REALLY needs to get POSITIVE advertising out there, and lots of it for at least a year. The negativity is killing us. Not only that, and this really steams me, the media is scaring poor little Mr and Mrs Senior who really need a Reverse out of getting one, and that's the most terrible part.
November 18th, 2009 at 9:55 am (#)
This is pure speculation but I think if AARP is moving from a nutural position to a positive position on Reverse Mortage, it is because a partnership is in the wings and they need to be positive to be profitable (bad word for a non-profit). I have heard rumors about a partership as far back as May of 2008.
November 18th, 2009 at 10:51 am (#)
I think you are either being pressured to put support behind AARP or you are living in a dream world.
November 18th, 2009 at 8:06 pm (#)
Genworth has always thought they were the perfect partner for AARP.
November 18th, 2009 at 8:24 pm (#)
Our CPA firm audited hundreds of nonprofits. There is an old adage among nonprofits, “the only nonprofits which last are ones which make profits.” Nonprofits, tax-exempts, and charitiable organizations are complex and a field unto their own. AARP encompasses them all plus some taxable activities. It is a diverse and sometimes loosely connected group of entities.
November 18th, 2009 at 8:59 pm (#)
James Veale,
Well put my friend, very well put. I am glad but cautious to see AARP's position and support. We need them now more than ever. If they truly join forces with NRMLA, we as an industry will have strength on our side.
John Smaldone
November 18th, 2009 at 9:00 pm (#)
James Veale,
Well put my friend, very well put. I am glad but cautious to see AARP's position and support. We need them now more than ever. If they truly join forces with NRMLA, we as an industry will have strength on our side.
John Smaldone
November 18th, 2009 at 9:56 pm (#)
I'm not sure that AARP really supports reverse mortgages… AARP supported last year's MN Legislation 100% and through the legislation commended the MN AG for implementing the bill. AARP would not even listen when it was brought to their attention how the bill would have negatively impacted seniors and likely mean that reverse mortgages would not be offered in MN. In fact they sent a message to their membership to contact Governor Pawlenty to sign the bill stating, “senior homeowners deserve to be protected from financial fraud that may lead to loss of equity or even foreclosure.”
Has AARP now gotten a better understanding of RMs and that they don't lead to “loss of equity” (borrowers actually have the access to their equity to use NOW) and that they don't lead to foreclosure but help seniors out of foreclosure? Also, have they stopped stating that they should be a last resort? Do they understand that the closing costs compare to conventional loans, the difference is the FHA mortgage insurance?
Until they get the facts right, I'm not sure how supportive they are of reverse mortgages.
I do however appreciate their recent informative video – it is a step in the right direction.