I share your bewilderment about squeezing $10 million from HECM to serve another cause, worthy or otherwise.

It shows that our leaders in Congress still don't get the strategic value of reverse mortgages and our industry in the age of runaway national debt and aging boomers. As I argued in a recent post (“Reverse Mortgages as National Security Assets,” http://www.thinkreverse.com), if we are going to solve the national debt crisis, we are going to need private resources; and reverse mortgages are the keys to unlocking vaults holding trillions in private resources. When they understand this aspect of reverse mortgages, they will see reverse mortgages and supporting the HECM insurance fund differently. Similar to other essential national security assets, necessity will compel them to support it and the industry.

I ascribe the behavior of the House last year to bailout fatigue. As always, your incisive comments are instructive and refreshing.

Thanks,

Atare

You are right.

Last year we all heard that it was Representative Latham (R-IA) in the House Appropriations subcommittee that oversees the HUD appropriation who recommended and fought that the HECM program not be granted the $798 million requested. That was absolutely true.

Here Representative Latham is protecting the $150 million appropriation. What changed his view? Perhaps far more importantly what happened that the House Democrats simply went along with Representative Latham last year but not this?

It is not a $10 million appropriation to a worthy cause that is a problem. It is choosing the HECM program as the program to reduce which is.

While it seems clear there are fewer Congressional Democrats who do not support FHA or the HECM program than Congressional Republicans, the overwhelming Congressional members of both parties in fact support both FHA and the HECM program. What we saw last year was how shallow that “overwhelming support” really is even among Congressional Democrats who held the vast majority in both the House and the Senate. Now we see it in the House once again.

We not only need to shore up support among Republicans but perhaps more importantly, we need to shore up the support for the HECM program among Democrats. It is in crucial times like these when we see how much support the program actually has.