Differing Strategies on Reverse Mortgage Legislation

When it comes to lobbying state legislators conjuring new laws to regulate the reverse mortgage product in their individual jurisdictions, industry advocates take differing approaches.

These advocates claim some success in shaping both the debate and resulting statutes that affect reverse mortgage lending, already heavily regulated on the federal level. However, there is disagreement around the “MO”.

At the National Reverse Mortgage Lenders Association, for example, President Peter Bell says: “We’re not looking to move a model law,” although he acknowledges that “others are pushing it” – a veiled reference to the Mortgage Bankers Association. Bell’s reasoning: “Why go looking to push [a model law]” where they’re not thinking of such legislation in the first place? “That’s just sticking your head up to be shot at,” he notes colorfully.


Last fall, the lead MBA spokesperson, Regina Lowrie, who heads an MBA reverse mortgage task force, told RMD that the Association’s model document is intended to “get ahead of the [legislative] curve and give [state lawmakers] a framework.”

Sarah Hulbert, CEO, Senior Financial Corp. – and ex-officio chair of the NRMLA board – says model legislation “may serve as a starting point,” but meaningful dialogue between industry practitioners and lawmakers is more useful. While individual states “feel the need to protect their constituents” with reverse mortgage legislation, Hulbert says HECM “is the only reverse out there in today’s economic environment, and it already falls under numerous regulatory agencies and authorities.”

Many new state-level laws only serve to “create duplication,” she argues. In Hulbert’s state of Washington, a new law signed by the governor on April 21, 2009 gave state residents more access to reverse mortgage lenders and applied new safeguards intended to increase consumer security. Four other states passed laws in 2009 regulating reverse mortgages: California, New York, South Carolina and Vermont.

Neil J. Morse has been a communications professional working in the mortgage finance industry for more than a decade. He can be reached at nmorse@reversemortgagedaily.com

Join the Conversation (4)

see all

This is a professional community. Please use discretion when posting a comment.

  • Mr. Peter Bell and I do not see eye-to-eye on this issue at all. Yet I agree with the strategy that Mr. Bell takes over that taken by the MBA.

    For those who advocate still lower net principal limits for seniors, they will love the MBA bill. For those who believe in legislation for legislation sake, the MBA bill will bring satisfaction. It is not the idea of the MBA creating such a bill that is bothering; it is the bill itself.

    As Admin can attest to, it is surprising while doing research on the bill, how little some who were highly involved in its creation knew about specific contents; yet as a model bill it is relatively short. An article analyzing the section of the bill in question will be submitted to Admin in the next few weeks. The MBA has already submitted the bill to all of the states’ legislative branches. As an officer of a lender which is a firm member of the MBA it is difficult to find fault with the actions of the MBA, but the state model bill as originally advocated to the states is something that needs to be withdrawn and rewritten. There is already some significant action being taken to have the bill rewritten.

    A state reverse mortgage model bill needs to be created. However, the MBA state model bill should be withdrawn and a new attempt with a new strategy made to create one.

    A new state model bill should be written in consultation with a consortium of representatives from among state lawmakers, their legislative staffs, legal consultants who write state bills, state regulators who will oversee the administration of such bills, reverse mortgage lenders, their legal staffs, trade associations, recognized elder advocates, and other parties who legitimately should be included. This is the way that state model bills have been successfully written and implemented in the past and is very close to the manner in which the California proposed legislation went from an overzealous devastating measure into a framework from which to provide reasonable protections to seniors. The MBA state model bill was written solely by industry experts.

  • I am getting out of reverses after the 1st of January and I suggest that everybody does. I have it on good authority that reverse-mortgages are slated to be essentially extinct by next Summer. Let's go find a growing industry as opposed to hanging on to a dying one.

  • I would be very surprised if the HECM went away anytime soon. I think we are good for at least another 20 years. I do beleive that the # of HECM Brokers will be declining, leaving only the bigger shops to continue working with our seniors. I guess only time will tell.

string(97) "https://reversemortgagedaily.com/2009/12/21/differing-strategies-on-reverse-mortgage-legislation/"

Share your opinion