MortgageOrb editor Phill Hall sits down with John LaRose, CEO of reverse mortgage subservicer Celink to talk about how the industry is handling the recession and the challenges it faces in the coming years.
Specifically, LaRose tells MortgageOrb that the two most significant issues facing the industry are the reliance on Fannie Mae and the growing issue of tax and insurance defaults. “With these two remaining issues unresolved, we are facing an uncertain future and that’s what keeps me up at night,” said LaRose.
Below is a quick snapshot of the beginning of the interview:
Q: Reverse mortgages have recently been the subject of comments about risk – first from Comptroller of the Currency John Dugan and then from a Government Accountability Office report in June that called for the "need for improved controls over counseling for borrowers." Why do you feel these types of comments are now popping up?
LaRose: I think it’s natural when a highly unique and complex loan product like a reverse mortgage, designed for the singular demographic of our senior citizens, starts growing so substantially that regulators will literally "trip over themselves" to try and protect the borrowers. We welcome regulation and oversight, but some of what is happening at the state level is getting quite ridiculous, because a lot of it is merely redundant with what is already in place at the federal level.
The National Reverse Mortgage Lenders Association has always taken a very strong approach to promoting ethics within the industry, which, in fact, compelled our company to publish our own code of ethics.
That said, I believe the sudden surge in reverse mortgages in the past few years has definitely placed a strain on counseling resources, and I think if the Department of Housing and Urban Development (HUD) addressed this mostly unfunded mandate, it would help alleviate the problem. I also believe the federal government would do well by providing HUD with the funds, internal resources and staff to improve its oversight and management of counselors.