MBA Reverse Mortgage Legislation Priorities for 2010

Screen shot 2010-03-01 at 9.40.51 AM.pngEnsuring the long term viability of the Federal Housing Administration (FHA) is the top priority for the Mortgage Bankers Association in 2010. “While the policy issues before our industry are many and we will work on them all” says the MBA. The association’s focus will be “to ensure that it can continue to provide stability liquidity and affordability to the housing market during this difficult time in housing finance.”

According to its Legislation and regulator Priorities for 2010, the MBA believes that FHA should evaluate and modify where appropriate, its credit policies and other standards and procedures for single family and multifamily insurance programs.

MBA also supports FHA efforts to improve its single family programs by reevaluating credit and underwriting standards, reexamining the insurance premium structure and enhancing consumer and lender protections for FHA’s reverse mortgage program.

Advertisement

“MBA is supportive of the HECM program for senior borrowers who are living longer and want to use the equity in their homes to manage their retirement and to help pay for expenses,” said Tamara King, MBA’s Director of Loan Production in an email to RMD. King added “We would not want to change the HECM product in a way that would hurt the program’s viability at a time when seniors truly need an array of financial options available to them.”

In response to the FHA’s decision to raise the MIP and lower the principal limits for the HECM program due to the OMB’s subsidy request, the MBA said it’s “willing to work with the FHA to ensure the integrity of this product is upheld and offered in a responsible manner to qualified borrowers.”

The MBA is also supportive of increasing mortgagee’s net worth requirement to $2.5 million and the Federal Financial Institutions Examination Council (FFIEC) proposed guidelines for institutions to manage compliance and reputation risks associated with reverse mortgage products.

Companies featured in this article:

,

Join the Conversation (5)

see all

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

  • “In response to the FHA’s decision to raise the MIP and lower the principal limits for the HECM program due to the OMB’s subsidy request, the MBA said it’s 'willing to work with the FHA to ensure the integrity of this product is upheld and offered in a responsible manner to qualified borrowers.'”

    What is it that Ms. King is saying the MBA position is? What kind of position is that?

  • I find it ironic that MBA takes a higher profile on these issues than NRMLA. MBA does not have the reverse mortgage product, and those affiliated with it, as their top priority. I feel we have become a baragining chip for them to use as commerce in conjunction with their other priorities.

    • Lance,

      Much agreed.

      I found and find their model act reflective of their lack of knowledge of the product and their positions on serious issues for our industry to be far less than stellar. Why then do they have a reverse mortgage division? Is it to keep us in line so as not to disturb their forward objectives?

  • It's not irony at work here, it's design.

    I don't accept the basic premise of conspiracy theory that the opponent is irresistably competent, devious and omnipotent, but IMHO, the MBA gives me pause to reconsider that view.

    Having worked in both bank and broker channels, I can tell you that the respective mindsets are often very far removed fom each other. The MBA's positions tend to reflect their sincere belief that THEY are the only proper and legitimate channel of financial services, that THEY ARE the industry, that THEY are the only properly compliant practioners, so what is good for them is good for everybody, including the borrowers. Why should they have to lower themselves to answer our criticisms when THEY are the real deal to begin with – what could we hoi polloi possibly teach them?

    Remember, for every $1 in deposits, depository instutions can borrow and loan out $9 – the leverage is immense and the arbitrage between the cost of funds and the interest rate charged to bank customers can be hugely profitable. It's been that way long enough that generations of depositories view this stacked deck as a divine right. They are the “made men” and we've been messing with their pinkie rings, capiche?

    This latest position is another indication of a sustained effort, not to just passively align itself with the interests of consumer advocacy, but to actively adopt and promote some advocacy positions as MBA/MBA member positions. How come? Because the best way to predict the future is to make as much of it as possible happen now on as many of your terms as possible.

    I don't know if it happened because they were smart or just lucky, but wearing the fleece of consumer advocacy and fiduciary responsibility helped depositories enlist a powerful but credulous lobby and a press looking for answers to do its work for them and leave none of its own fingerprints behind. This was how the blame for the failure of the forward loan products the banks designed, the investment bankers sold as bonds, the bond credit ratings agencies over-rated, and the securities regulators who allowed disinterested derivatives speculators to bet on all seemed to fall upon the “evil” mortgage brokers… that by pure coincidence happened to also be the highly competitive distribution channel for mortgage loan originations.

    The MBA's members didn't just try to re-direct the attention of the press and the public on their own. Independent passionate non-profit consumer advocates and journalists volunteered in that fight and channeled their righteous indignation at mortgage brokers. The depositories themselves stayed above it all while these public-spirited guardians did their PR and lobbying for them.

    This latest statement is just more of the same strategic positioning but its now more of an outeach to newly energized (and newly chastened and reactionary) regulatory entities which want to be seen as the official governmental branch of consumer advocacy, protection, and enforcement so they can expand the moat around their already privileged leverage. “See how responsible the members of the MBA are, Mr. and Mrs. Regulatory Body? See why you should restrict all that uncontrolled non-in-house lending by that unruly mob of yield spread grabbers that all our poor different states are so unable to handle? And let them work with seniors, are you serious? We'll help you get a better handle on all this so nobody makes you look bad again.”

    … I'm okay, I feel all better now.

  • It’s not irony at work here, it’s design.rnrnI don’t accept the basic premise of conspiracy theory that the opponent is irresistably competent, devious and omnipotent, but IMHO, the MBA gives me pause to reconsider that view.rnrnHaving worked in both bank and broker channels, I can tell you that the respective mindsets are often very far removed fom each other. The MBA’s positions tend to reflect their sincere belief that THEY are the only proper and legitimate channel of financial services, that THEY ARE the industry, that THEY are the only properly compliant practioners, so what is good for them is good for everybody, including the borrowers. Why should they have to lower themselves to answer our criticisms when THEY are the real deal to begin with – what could we hoi polloi possibly teach them?rnrnRemember, for every $1 in deposits, depository instutions can borrow and loan out $9 – the leverage is immense and the arbitrage between the cost of funds and the interest rate charged to bank customers can be hugely profitable. It’s been that way long enough that generations of depositories view this stacked deck as a divine right. They are the “made men” and we’ve been messing with their pinkie rings, capiche?rnrnThis latest position is another indication of a sustained effort, not to just passively align itself with the interests of consumer advocacy, but to actively adopt and promote some advocacy positions as MBA/MBA member positions. How come? Because the best way to predict the future is to make as much of it as possible happen now on as many of your terms as possible.rnrnI don’t know if it happened because they were smart or just lucky, but wearing the fleece of consumer advocacy and fiduciary responsibility helped depositories enlist a powerful but credulous lobby and a press looking for answers to do its work for them and leave none of its own fingerprints behind. This was how the blame for the failure of the forward loan products the banks designed, the investment bankers sold as bonds, the bond credit ratings agencies over-rated, and the securities regulators who allowed disinterested derivatives speculators to bet on all seemed to fall upon the “evil” mortgage brokers… that by pure coincidence happened to also be the highly competitive distribution channel for mortgage loan originations. rnrnThe MBA’s members didn’t just try to re-direct the attention of the press and the public on their own. Independent passionate non-profit consumer advocates and journalists volunteered in that fight and channeled their righteous indignation at mortgage brokers. The depositories themselves stayed above it all while these public-spirited guardians did their PR and lobbying for them.rnrnThis latest statement is just more of the same strategic positioning but its now more of an outeach to newly energized (and newly chastened and reactionary) regulatory entities which want to be seen as the official governmental branch of consumer advocacy, protection, and enforcement so they can expand the moat around their already privileged leverage. “See how responsible the members of the MBA are, Mr. and Mrs. Regulatory Body? See why you should restrict all that uncontrolled non-in-house lending by that unruly mob of yield spread grabbers that all our poor different states are so unable to handle? And let them work with seniors, are you serious? We’ll help you get a better handle on all this so nobody makes you look bad again.”rnrnrnrn… I’m okay, I feel all better now.

string(97) "https://reversemortgagedaily.com/2010/03/14/mba-reverse-mortgage-legislation-priorities-for-2010/"

Share your opinion