MBA Supports Net Worth Increase for Reverse Mortgage Lenders

image The Mortgage Bankers Association is taking a different stance than the National Reverse Mortgage Lenders Association on the US Department of Housing and Urban Developments proposal to raise net worth requirements and eliminate the approval of FHA loan correspondents.

"MBA supports limiting the approval process to qualified mortgagees and increasing the net worth requirement," said John Courson, MBA president and chief executive in a comment letter to HUD.

"However, we strongly believe market conditions merit an increased phased-in period," MBA says, "with lenders meeting a minimum net worth of $1 million by the end of year one."

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The trade association is requesting that HUD extend the timeline from 3 to 5 years due to an analysis conduced by the MBA which found that it would take companies with a current net worth of approximately $1 million five years to retain enough earnings to reach the $2.5 million threshold.

While the MBA is supportive of the net worth increases, NRMLA is requesting that HUD establish an FHA approved HECM mortgagee which requires a net worth of no more than $250,000 (current mortgagee requirement) and whose principal activity is the origination of reverse mortgages.

NRMLA’s proposal is clearly more favorable to small brokers and lenders compared to the MBA.

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  • Some of those who commented positively regarding Peter Bell's concept were among the biggest supporters of the MBA reverse mortgage section. It has been clear that the MBA will support positions more favorable to forward lenders even if it is harmful to its reverse mortgage members.

    NRMLA only has one allegiance

  • Peter and the NRMLA staff have to be smiling.

    The MBA, typical of large organizations, is really only looking out for their large members. They simply can't be bothered with the small to medium size operations.

    NRMLA is looking like the hero on this one…

  • How in the hell can the MBA justify coming out with this ridiculous, counter-productive statement? Their attempts to wrangle the NRMLA members away has failed miserably. They have yet to get any traction on their reverse mortgage “division”, and their reverse mortgage conferences are a joke.

    C'mon MBA, step aside and admit defeat when it is staring you in the face!

  • I didn't realize there's competition between the MBA and NRMLA; many firms are members of both. The most cogent argument on behalf of the small business originator (i.e., FHA correspondent) comes from yet another organization, the National Association of Mortgage Brokers (NAMB). NAMB's comments on the FHA Proposed Rule may be found here: http://capwiz.com/namb/issues/alert/?alertid=14

  • These intramural disagreements are a perfect example of the problems this industry faces. If MBA and NRMLA's positions are so divergent, how can brokers of any size rely on effective representation by these organizations?

  • These intramural disagreements are a perfect example of the problems this industry faces. If MBA and NRMLA’s positions are so divergent, how can brokers of any size rely on effective representation by these organizations?

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