FHA Reverse Mortgage Program Should Be Strengthened and Embraced says MBA

The Federal Housing Administration needs more resources manage its way through the current housing market crisis and thrive when the market recovers according to a report from the Mortgage Bankers Association.

Developed by the MBA’s Council on the Future of FHA and Ginnie Mae, the report provides 12 recommendations to improve the government agencies.

“FHA and Ginnie Mae are cornerstones of the U.S. housing market as they provide access to mortgage loans for millions of first-time, and low- and moderate-income homebuyers. MBA members support both of these institutions,” said MBA Chairman Robert  E. Story Jr., CMB.  “MBA has long advocated for changes that will help guarantee a strong FHA and Ginnie Mae.”

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The MBA’s council recommends that FHA strengthen and embrace the HECM) program as a viable and helpful product for seniors citizens. As the only government program that helps senior citizens age in place while providing them access to equity in their home, the continued erosion of housing prices has jeopardized the program’s future by impacting its actuarial foundation.

According to the report, the post 2007 housing market and its on-going negative or flat price assumptions make the need for an appropriation or further program modifications likely.  While the council realizes the FHA is required to determine its actuarial soundness through estimates and forecasts of the future economic value of the portfolio, it questions whether it’s the best approach.

“Given the enormous level of social importance of this determination, perhaps FHA should assess whether or not this is the best way to determine its perceived economic health,” said the report.  “This method is potentially problematic if the ripple effect of more pessimistic forecasts leads to even more programmatic constraints that make the HECM product so expensive and complex that seniors question its viability and affordability.”

After the 10 percent principal limit reduction in FY 2009, which eliminated most of the proposed $798 million subsidy, the number of seniors who have access to the program has fallen.

“On the surface, this seemed like a prudent and fiscally responsible move, however, the reduction in proceeds has contributed to the near flat, if not negative, growth in the program following years of steady volume increases,” said the report.

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  • Mr. Veale, The MBA has always been a day late and many dollars short when it comes to defending the Reverse Mortgage industry. nnI agree with your critique and can only write that if the MBA hopes to have any voice in the future of the reverse mortgage industry, they first get their facts straight and then put their considerable muscle behind getting HECMs fully funded. That would go a long way toward proving that the reverse mortgage industry is not an afterthought.n

  • When it comes to HECMs, the report is ridiculously dated. The MBA continues to suggest that taxes and insurance set asides be placed in escrow accounts. It fails to use common terms correctly. The report makes it clear that our industry is nothing more than an afterthought at the MBA.rn
    When it comes to the reduction on PLFs for the current fiscal year the report states: u201cOn the surface, this seemed like a prudent and fiscally responsible move, however, the reduction in proceeds has contributed to the near flat, if not negative, growth in the program following years of steady volume increases. One reverse mortgage lender estimates this change has caused a 20-25 percent drop in HECM transactions.u201d Near flat growth!!!! The report is dated this month, September 2010. We would love it if our growth were simply u201cnear flat.u201d September 2010 is the twelfth month of the pattern and yet they do not understand our volume is not even 70% of what it was for the prior fiscal year. That is history not predictions.rn
    As to the escrow account issue, the report states: u201cu2026participant counseling to include an individual financial assessment and whether or not escrow should be required. The lack of escrow has led to an increase in u2018tax and insuranceu2019 defaults with lenders apprehensive about foreclosure and adverse publicity.u201d Is it a lack of escrow accounts or a lack of a set asides?rn
    The MBA has continually taken the position that escrow accounts are to be preferred to set asides. Why should HECMs accrue interest on amounts held in escrow when set asides have long been the practice with HECMs? The interest earned on escrow accounts will normally be less than the interest that accrues on disbursements for escrow accounts and the interest earned will be taxable as earned while the accruing interest will not be deductible until paid.rn
    The report calls the cash seniors receive from a loan u201cincome.u201d These folks are mortgage bankers and do not seem to understand the difference. They have never called the cash out from a forward loan u201cincome.u201d So why do they state: u201cThe HECM product is the only government program that helps senior citizens u2018age in place,u2019 while also providing them income through access to the equity in their homesu201d?rn
    The report states: u201cAdditionally, Congress will need to appropriate sufficient funds in FY 2011 to keep the program available to seniors.u201d Do they understand that appropriations need to be made before the fiscal year begins? Do they understand what went on this fiscal year with no appropriation? This is a very careless statement.rn
    Here is another indication that the MBA has no idea what it is discussing when it comes to HECMs: u201cThe PLF is the amount of money the borrower is eligible to receive, subject to various criteriau2026.u201d Yet in the prior sentence it correctly identifies PLFs as Principal Limit Factors. The MBA does not seem to understand there is a significant difference between the Principal Limit Factors and Principal Limits.rn
    If the MBA wants to represents our interests they need to do a lot better than this report reflects. It is careless and dangerously outdated. It shows no empathy for our situation and could be cited to the detriment of the industry. The MBA needs to get its act together when it comes to HECMs and reverse mortgages generally. If the reverse mortgage industry does not understand we are little more than u201csecond cousinsu201d to the MBA, maybe this report will dispel that myth.rn
    The MBA can and should do much better when it comes to reverse mortgages. It should outshine the largely underfunded NRMLA but it does not.

  • Mr. Veale, The MBA has always been a day late and many dollars short when it comes to defending the Reverse Mortgage industry. nnI agree with your critique and can only write that if the MBA hopes to have any voice in the future of the reverse mortgage industry, they first get their facts straight and then put their considerable muscle behind getting HECMs fully funded. That would go a long way toward proving that the reverse mortgage industry is not an afterthought.n

  • When it comes to HECMs, the report is ridiculously dated. The MBA continues to suggest that taxes and insurance set asides be placed in escrow accounts. It fails to use common terms correctly. The report makes it clear that our industry is nothing more than an afterthought at the MBA.rn
    When it comes to the reduction on PLFs for the current fiscal year the report states: u201cOn the surface, this seemed like a prudent and fiscally responsible move, however, the reduction in proceeds has contributed to the near flat, if not negative, growth in the program following years of steady volume increases. One reverse mortgage lender estimates this change has caused a 20-25 percent drop in HECM transactions.u201d Near flat growth!!!! The report is dated this month, September 2010. We would love it if our growth were simply u201cnear flat.u201d September 2010 is the twelfth month of the pattern and yet they do not understand our volume is not even 70% of what it was for the prior fiscal year. That is history not predictions.rn
    As to the escrow account issue, the report states: u201cu2026participant counseling to include an individual financial assessment and whether or not escrow should be required. The lack of escrow has led to an increase in u2018tax and insuranceu2019 defaults with lenders apprehensive about foreclosure and adverse publicity.u201d Is it a lack of escrow accounts or a lack of a set asides?rn
    The MBA has continually taken the position that escrow accounts are to be preferred to set asides. Why should HECMs accrue interest on amounts held in escrow when set asides have long been the practice with HECMs? The interest earned on escrow accounts will normally be less than the interest that accrues on disbursements for escrow accounts and the interest earned will be taxable as earned while the accruing interest will not be deductible until paid.rn
    The report calls the cash seniors receive from a loan u201cincome.u201d These folks are mortgage bankers and do not seem to understand the difference. They have never called the cash out from a forward loan u201cincome.u201d So why do they state: u201cThe HECM product is the only government program that helps senior citizens u2018age in place,u2019 while also providing them income through access to the equity in their homesu201d?rn
    The report states: u201cAdditionally, Congress will need to appropriate sufficient funds in FY 2011 to keep the program available to seniors.u201d Do they understand that appropriations need to be made before the fiscal year begins? Do they understand what went on this fiscal year with no appropriation? This is a very careless statement.rn
    Here is another indication that the MBA has no idea what it is discussing when it comes to HECMs: u201cThe PLF is the amount of money the borrower is eligible to receive, subject to various criteriau2026.u201d Yet in the prior sentence it correctly identifies PLFs as Principal Limit Factors. The MBA does not seem to understand there is a significant difference between the Principal Limit Factors and Principal Limits.rn
    If the MBA wants to represents our interests they need to do a lot better than this report reflects. It is careless and dangerously outdated. It shows no empathy for our situation and could be cited to the detriment of the industry. The MBA needs to get its act together when it comes to HECMs and reverse mortgages generally. If the reverse mortgage industry does not understand we are little more than u201csecond cousinsu201d to the MBA, maybe this report will dispel that myth.rn
    The MBA can and should do much better when it comes to reverse mortgages. It should outshine the largely underfunded NRMLA but it does not.

  • Mr. Veale, The MBA has always been a day late and many dollars short when it comes to defending the Reverse Mortgage industry. nnI agree with your critique and can only write that if the MBA hopes to have any voice in the future of the reverse mortgage industry, they first get their facts straight and then put their considerable muscle behind getting HECMs fully funded. That would go a long way toward proving that the reverse mortgage industry is not an afterthought.n

  • When it comes to HECMs, the report is ridiculously dated. The MBA continues to suggest that taxes and insurance set asides be placed in escrow accounts. It fails to use common terms correctly. The report makes it clear that our industry is nothing more than an afterthought at the MBA.rn
    When it comes to the reduction on PLFs for the current fiscal year the report states: u201cOn the surface, this seemed like a prudent and fiscally responsible move, however, the reduction in proceeds has contributed to the near flat, if not negative, growth in the program following years of steady volume increases. One reverse mortgage lender estimates this change has caused a 20-25 percent drop in HECM transactions.u201d Near flat growth!!!! The report is dated this month, September 2010. We would love it if our growth were simply u201cnear flat.u201d September 2010 is the twelfth month of the pattern and yet they do not understand our volume is not even 70% of what it was for the prior fiscal year. That is history not predictions.rn
    As to the escrow account issue, the report states: u201cu2026participant counseling to include an individual financial assessment and whether or not escrow should be required. The lack of escrow has led to an increase in u2018tax and insuranceu2019 defaults with lenders apprehensive about foreclosure and adverse publicity.u201d Is it a lack of escrow accounts or a lack of a set asides?rn
    The MBA has continually taken the position that escrow accounts are to be preferred to set asides. Why should HECMs accrue interest on amounts held in escrow when set asides have long been the practice with HECMs? The interest earned on escrow accounts will normally be less than the interest that accrues on disbursements for escrow accounts and the interest earned will be taxable as earned while the accruing interest will not be deductible until paid.rn
    The report calls the cash seniors receive from a loan u201cincome.u201d These folks are mortgage bankers and do not seem to understand the difference. They have never called the cash out from a forward loan u201cincome.u201d So why do they state: u201cThe HECM product is the only government program that helps senior citizens u2018age in place,u2019 while also providing them income through access to the equity in their homesu201d?rn
    The report states: u201cAdditionally, Congress will need to appropriate sufficient funds in FY 2011 to keep the program available to seniors.u201d Do they understand that appropriations need to be made before the fiscal year begins? Do they understand what went on this fiscal year with no appropriation? This is a very careless statement.rn
    Here is another indication that the MBA has no idea what it is discussing when it comes to HECMs: u201cThe PLF is the amount of money the borrower is eligible to receive, subject to various criteriau2026.u201d Yet in the prior sentence it correctly identifies PLFs as Principal Limit Factors. The MBA does not seem to understand there is a significant difference between the Principal Limit Factors and Principal Limits.rn
    If the MBA wants to represents our interests they need to do a lot better than this report reflects. It is careless and dangerously outdated. It shows no empathy for our situation and could be cited to the detriment of the industry. The MBA needs to get its act together when it comes to HECMs and reverse mortgages generally. If the reverse mortgage industry does not understand we are little more than u201csecond cousinsu201d to the MBA, maybe this report will dispel that myth.rn
    The MBA can and should do much better when it comes to reverse mortgages. It should outshine the largely underfunded NRMLA but it does not.

  • Mr. Veale, The MBA has always been a day late and many dollars short when it comes to defending the Reverse Mortgage industry. nnI agree with your critique and can only write that if the MBA hopes to have any voice in the future of the reverse mortgage industry, they first get their facts straight and then put their considerable muscle behind getting HECMs fully funded. That would go a long way toward proving that the reverse mortgage industry is not an afterthought.n

  • When it comes to HECMs, the report is ridiculously dated. The MBA continues to suggest that taxes and insurance set asides be placed in escrow accounts. It fails to use common terms correctly. The report makes it clear that our industry is nothing more than an afterthought at the MBA.rn
    When it comes to the reduction on PLFs for the current fiscal year the report states: u201cOn the surface, this seemed like a prudent and fiscally responsible move, however, the reduction in proceeds has contributed to the near flat, if not negative, growth in the program following years of steady volume increases. One reverse mortgage lender estimates this change has caused a 20-25 percent drop in HECM transactions.u201d Near flat growth!!!! The report is dated this month, September 2010. We would love it if our growth were simply u201cnear flat.u201d September 2010 is the twelfth month of the pattern and yet they do not understand our volume is not even 70% of what it was for the prior fiscal year. That is history not predictions.rn
    As to the escrow account issue, the report states: u201cu2026participant counseling to include an individual financial assessment and whether or not escrow should be required. The lack of escrow has led to an increase in u2018tax and insuranceu2019 defaults with lenders apprehensive about foreclosure and adverse publicity.u201d Is it a lack of escrow accounts or a lack of a set asides?rn
    The MBA has continually taken the position that escrow accounts are to be preferred to set asides. Why should HECMs accrue interest on amounts held in escrow when set asides have long been the practice with HECMs? The interest earned on escrow accounts will normally be less than the interest that accrues on disbursements for escrow accounts and the interest earned will be taxable as earned while the accruing interest will not be deductible until paid.rn
    The report calls the cash seniors receive from a loan u201cincome.u201d These folks are mortgage bankers and do not seem to understand the difference. They have never called the cash out from a forward loan u201cincome.u201d So why do they state: u201cThe HECM product is the only government program that helps senior citizens u2018age in place,u2019 while also providing them income through access to the equity in their homesu201d?rn
    The report states: u201cAdditionally, Congress will need to appropriate sufficient funds in FY 2011 to keep the program available to seniors.u201d Do they understand that appropriations need to be made before the fiscal year begins? Do they understand what went on this fiscal year with no appropriation? This is a very careless statement.rn
    Here is another indication that the MBA has no idea what it is discussing when it comes to HECMs: u201cThe PLF is the amount of money the borrower is eligible to receive, subject to various criteriau2026.u201d Yet in the prior sentence it correctly identifies PLFs as Principal Limit Factors. The MBA does not seem to understand there is a significant difference between the Principal Limit Factors and Principal Limits.rn
    If the MBA wants to represents our interests they need to do a lot better than this report reflects. It is careless and dangerously outdated. It shows no empathy for our situation and could be cited to the detriment of the industry. The MBA needs to get its act together when it comes to HECMs and reverse mortgages generally. If the reverse mortgage industry does not understand we are little more than u201csecond cousinsu201d to the MBA, maybe this report will dispel that myth.rn
    The MBA can and should do much better when it comes to reverse mortgages. It should outshine the largely underfunded NRMLA but it does not.

  • Mr. Veale, The MBA has always been a day late and many dollars short when it comes to defending the Reverse Mortgage industry. nnI agree with your critique and can only write that if the MBA hopes to have any voice in the future of the reverse mortgage industry, they first get their facts straight and then put their considerable muscle behind getting HECMs fully funded. That would go a long way toward proving that the reverse mortgage industry is not an afterthought.n

  • When it comes to HECMs, the report is ridiculously dated. The MBA continues to suggest that taxes and insurance set asides be placed in escrow accounts. It fails to use common terms correctly. The report makes it clear that our industry is nothing more than an afterthought at the MBA.rn
    When it comes to the reduction on PLFs for the current fiscal year the report states: u201cOn the surface, this seemed like a prudent and fiscally responsible move, however, the reduction in proceeds has contributed to the near flat, if not negative, growth in the program following years of steady volume increases. One reverse mortgage lender estimates this change has caused a 20-25 percent drop in HECM transactions.u201d Near flat growth!!!! The report is dated this month, September 2010. We would love it if our growth were simply u201cnear flat.u201d September 2010 is the twelfth month of the pattern and yet they do not understand our volume is not even 70% of what it was for the prior fiscal year. That is history not predictions.rn
    As to the escrow account issue, the report states: u201cu2026participant counseling to include an individual financial assessment and whether or not escrow should be required. The lack of escrow has led to an increase in u2018tax and insuranceu2019 defaults with lenders apprehensive about foreclosure and adverse publicity.u201d Is it a lack of escrow accounts or a lack of a set asides?rn
    The MBA has continually taken the position that escrow accounts are to be preferred to set asides. Why should HECMs accrue interest on amounts held in escrow when set asides have long been the practice with HECMs? The interest earned on escrow accounts will normally be less than the interest that accrues on disbursements for escrow accounts and the interest earned will be taxable as earned while the accruing interest will not be deductible until paid.rn
    The report calls the cash seniors receive from a loan u201cincome.u201d These folks are mortgage bankers and do not seem to understand the difference. They have never called the cash out from a forward loan u201cincome.u201d So why do they state: u201cThe HECM product is the only government program that helps senior citizens u2018age in place,u2019 while also providing them income through access to the equity in their homesu201d?rn
    The report states: u201cAdditionally, Congress will need to appropriate sufficient funds in FY 2011 to keep the program available to seniors.u201d Do they understand that appropriations need to be made before the fiscal year begins? Do they understand what went on this fiscal year with no appropriation? This is a very careless statement.rn
    Here is another indication that the MBA has no idea what it is discussing when it comes to HECMs: u201cThe PLF is the amount of money the borrower is eligible to receive, subject to various criteriau2026.u201d Yet in the prior sentence it correctly identifies PLFs as Principal Limit Factors. The MBA does not seem to understand there is a significant difference between the Principal Limit Factors and Principal Limits.rn
    If the MBA wants to represents our interests they need to do a lot better than this report reflects. It is careless and dangerously outdated. It shows no empathy for our situation and could be cited to the detriment of the industry. The MBA needs to get its act together when it comes to HECMs and reverse mortgages generally. If the reverse mortgage industry does not understand we are little more than u201csecond cousinsu201d to the MBA, maybe this report will dispel that myth.rn
    The MBA can and should do much better when it comes to reverse mortgages. It should outshine the largely underfunded NRMLA but it does not.

  • Mr. Veale, The MBA has always been a day late and many dollars short when it comes to defending the Reverse Mortgage industry. nnI agree with your critique and can only write that if the MBA hopes to have any voice in the future of the reverse mortgage industry, they first get their facts straight and then put their considerable muscle behind getting HECMs fully funded. That would go a long way toward proving that the reverse mortgage industry is not an afterthought.n

  • When it comes to HECMs, the report is ridiculously dated. The MBA continues to suggest that taxes and insurance set asides be placed in escrow accounts. It fails to use common terms correctly. The report makes it clear that our industry is nothing more than an afterthought at the MBA.rn
    When it comes to the reduction on PLFs for the current fiscal year the report states: u201cOn the surface, this seemed like a prudent and fiscally responsible move, however, the reduction in proceeds has contributed to the near flat, if not negative, growth in the program following years of steady volume increases. One reverse mortgage lender estimates this change has caused a 20-25 percent drop in HECM transactions.u201d Near flat growth!!!! The report is dated this month, September 2010. We would love it if our growth were simply u201cnear flat.u201d September 2010 is the twelfth month of the pattern and yet they do not understand our volume is not even 70% of what it was for the prior fiscal year. That is history not predictions.rn
    As to the escrow account issue, the report states: u201cu2026participant counseling to include an individual financial assessment and whether or not escrow should be required. The lack of escrow has led to an increase in u2018tax and insuranceu2019 defaults with lenders apprehensive about foreclosure and adverse publicity.u201d Is it a lack of escrow accounts or a lack of a set asides?rn
    The MBA has continually taken the position that escrow accounts are to be preferred to set asides. Why should HECMs accrue interest on amounts held in escrow when set asides have long been the practice with HECMs? The interest earned on escrow accounts will normally be less than the interest that accrues on disbursements for escrow accounts and the interest earned will be taxable as earned while the accruing interest will not be deductible until paid.rn
    The report calls the cash seniors receive from a loan u201cincome.u201d These folks are mortgage bankers and do not seem to understand the difference. They have never called the cash out from a forward loan u201cincome.u201d So why do they state: u201cThe HECM product is the only government program that helps senior citizens u2018age in place,u2019 while also providing them income through access to the equity in their homesu201d?rn
    The report states: u201cAdditionally, Congress will need to appropriate sufficient funds in FY 2011 to keep the program available to seniors.u201d Do they understand that appropriations need to be made before the fiscal year begins? Do they understand what went on this fiscal year with no appropriation? This is a very careless statement.rn
    Here is another indication that the MBA has no idea what it is discussing when it comes to HECMs: u201cThe PLF is the amount of money the borrower is eligible to receive, subject to various criteriau2026.u201d Yet in the prior sentence it correctly identifies PLFs as Principal Limit Factors. The MBA does not seem to understand there is a significant difference between the Principal Limit Factors and Principal Limits.rn
    If the MBA wants to represents our interests they need to do a lot better than this report reflects. It is careless and dangerously outdated. It shows no empathy for our situation and could be cited to the detriment of the industry. The MBA needs to get its act together when it comes to HECMs and reverse mortgages generally. If the reverse mortgage industry does not understand we are little more than u201csecond cousinsu201d to the MBA, maybe this report will dispel that myth.rn
    The MBA can and should do much better when it comes to reverse mortgages. It should outshine the largely underfunded NRMLA but it does not.

  • Mr. Veale, The MBA has always been a day late and many dollars short when it comes to defending the Reverse Mortgage industry. nnI agree with your critique and can only write that if the MBA hopes to have any voice in the future of the reverse mortgage industry, they first get their facts straight and then put their considerable muscle behind getting HECMs fully funded. That would go a long way toward proving that the reverse mortgage industry is not an afterthought.n

  • When it comes to HECMs, the report is ridiculously dated. The MBA continues to suggest that taxes and insurance set asides be placed in escrow accounts. It fails to use common terms correctly. The report makes it clear that our industry is nothing more than an afterthought at the MBA.rn
    When it comes to the reduction on PLFs for the current fiscal year the report states: u201cOn the surface, this seemed like a prudent and fiscally responsible move, however, the reduction in proceeds has contributed to the near flat, if not negative, growth in the program following years of steady volume increases. One reverse mortgage lender estimates this change has caused a 20-25 percent drop in HECM transactions.u201d Near flat growth!!!! The report is dated this month, September 2010. We would love it if our growth were simply u201cnear flat.u201d September 2010 is the twelfth month of the pattern and yet they do not understand our volume is not even 70% of what it was for the prior fiscal year. That is history not predictions.rn
    As to the escrow account issue, the report states: u201cu2026participant counseling to include an individual financial assessment and whether or not escrow should be required. The lack of escrow has led to an increase in u2018tax and insuranceu2019 defaults with lenders apprehensive about foreclosure and adverse publicity.u201d Is it a lack of escrow accounts or a lack of a set asides?rn
    The MBA has continually taken the position that escrow accounts are to be preferred to set asides. Why should HECMs accrue interest on amounts held in escrow when set asides have long been the practice with HECMs? The interest earned on escrow accounts will normally be less than the interest that accrues on disbursements for escrow accounts and the interest earned will be taxable as earned while the accruing interest will not be deductible until paid.rn
    The report calls the cash seniors receive from a loan u201cincome.u201d These folks are mortgage bankers and do not seem to understand the difference. They have never called the cash out from a forward loan u201cincome.u201d So why do they state: u201cThe HECM product is the only government program that helps senior citizens u2018age in place,u2019 while also providing them income through access to the equity in their homesu201d?rn
    The report states: u201cAdditionally, Congress will need to appropriate sufficient funds in FY 2011 to keep the program available to seniors.u201d Do they understand that appropriations need to be made before the fiscal year begins? Do they understand what went on this fiscal year with no appropriation? This is a very careless statement.rn
    Here is another indication that the MBA has no idea what it is discussing when it comes to HECMs: u201cThe PLF is the amount of money the borrower is eligible to receive, subject to various criteriau2026.u201d Yet in the prior sentence it correctly identifies PLFs as Principal Limit Factors. The MBA does not seem to understand there is a significant difference between the Principal Limit Factors and Principal Limits.rn
    If the MBA wants to represents our interests they need to do a lot better than this report reflects. It is careless and dangerously outdated. It shows no empathy for our situation and could be cited to the detriment of the industry. The MBA needs to get its act together when it comes to HECMs and reverse mortgages generally. If the reverse mortgage industry does not understand we are little more than u201csecond cousinsu201d to the MBA, maybe this report will dispel that myth.rn
    The MBA can and should do much better when it comes to reverse mortgages. It should outshine the largely underfunded NRMLA but it does not.

  • Mr. Veale, The MBA has always been a day late and many dollars short when it comes to defending the Reverse Mortgage industry. nnI agree with your critique and can only write that if the MBA hopes to have any voice in the future of the reverse mortgage industry, they first get their facts straight and then put their considerable muscle behind getting HECMs fully funded. That would go a long way toward proving that the reverse mortgage industry is not an afterthought.n

  • When it comes to HECMs, the report is ridiculously dated. The MBA continues to suggest that taxes and insurance set asides be placed in escrow accounts. It fails to use common terms correctly. The report makes it clear that our industry is nothing more than an afterthought at the MBA.rn
    When it comes to the reduction on PLFs for the current fiscal year the report states: u201cOn the surface, this seemed like a prudent and fiscally responsible move, however, the reduction in proceeds has contributed to the near flat, if not negative, growth in the program following years of steady volume increases. One reverse mortgage lender estimates this change has caused a 20-25 percent drop in HECM transactions.u201d Near flat growth!!!! The report is dated this month, September 2010. We would love it if our growth were simply u201cnear flat.u201d September 2010 is the twelfth month of the pattern and yet they do not understand our volume is not even 70% of what it was for the prior fiscal year. That is history not predictions.rn
    As to the escrow account issue, the report states: u201cu2026participant counseling to include an individual financial assessment and whether or not escrow should be required. The lack of escrow has led to an increase in u2018tax and insuranceu2019 defaults with lenders apprehensive about foreclosure and adverse publicity.u201d Is it a lack of escrow accounts or a lack of a set asides?rn
    The MBA has continually taken the position that escrow accounts are to be preferred to set asides. Why should HECMs accrue interest on amounts held in escrow when set asides have long been the practice with HECMs? The interest earned on escrow accounts will normally be less than the interest that accrues on disbursements for escrow accounts and the interest earned will be taxable as earned while the accruing interest will not be deductible until paid.rn
    The report calls the cash seniors receive from a loan u201cincome.u201d These folks are mortgage bankers and do not seem to understand the difference. They have never called the cash out from a forward loan u201cincome.u201d So why do they state: u201cThe HECM product is the only government program that helps senior citizens u2018age in place,u2019 while also providing them income through access to the equity in their homesu201d?rn
    The report states: u201cAdditionally, Congress will need to appropriate sufficient funds in FY 2011 to keep the program available to seniors.u201d Do they understand that appropriations need to be made before the fiscal year begins? Do they understand what went on this fiscal year with no appropriation? This is a very careless statement.rn
    Here is another indication that the MBA has no idea what it is discussing when it comes to HECMs: u201cThe PLF is the amount of money the borrower is eligible to receive, subject to various criteriau2026.u201d Yet in the prior sentence it correctly identifies PLFs as Principal Limit Factors. The MBA does not seem to understand there is a significant difference between the Principal Limit Factors and Principal Limits.rn
    If the MBA wants to represents our interests they need to do a lot better than this report reflects. It is careless and dangerously outdated. It shows no empathy for our situation and could be cited to the detriment of the industry. The MBA needs to get its act together when it comes to HECMs and reverse mortgages generally. If the reverse mortgage industry does not understand we are little more than u201csecond cousinsu201d to the MBA, maybe this report will dispel that myth.rn
    The MBA can and should do much better when it comes to reverse mortgages. It should outshine the largely underfunded NRMLA but it does not.

  • Mr. Veale, The MBA has always been a day late and many dollars short when it comes to defending the Reverse Mortgage industry. nnI agree with your critique and can only write that if the MBA hopes to have any voice in the future of the reverse mortgage industry, they first get their facts straight and then put their considerable muscle behind getting HECMs fully funded. That would go a long way toward proving that the reverse mortgage industry is not an afterthought.n

  • When it comes to HECMs, the report is ridiculously dated. The MBA continues to suggest that taxes and insurance set asides be placed in escrow accounts. It fails to use common terms correctly. The report makes it clear that our industry is nothing more than an afterthought at the MBA.rn
    When it comes to the reduction on PLFs for the current fiscal year the report states: u201cOn the surface, this seemed like a prudent and fiscally responsible move, however, the reduction in proceeds has contributed to the near flat, if not negative, growth in the program following years of steady volume increases. One reverse mortgage lender estimates this change has caused a 20-25 percent drop in HECM transactions.u201d Near flat growth!!!! The report is dated this month, September 2010. We would love it if our growth were simply u201cnear flat.u201d September 2010 is the twelfth month of the pattern and yet they do not understand our volume is not even 70% of what it was for the prior fiscal year. That is history not predictions.rn
    As to the escrow account issue, the report states: u201cu2026participant counseling to include an individual financial assessment and whether or not escrow should be required. The lack of escrow has led to an increase in u2018tax and insuranceu2019 defaults with lenders apprehensive about foreclosure and adverse publicity.u201d Is it a lack of escrow accounts or a lack of a set asides?rn
    The MBA has continually taken the position that escrow accounts are to be preferred to set asides. Why should HECMs accrue interest on amounts held in escrow when set asides have long been the practice with HECMs? The interest earned on escrow accounts will normally be less than the interest that accrues on disbursements for escrow accounts and the interest earned will be taxable as earned while the accruing interest will not be deductible until paid.rn
    The report calls the cash seniors receive from a loan u201cincome.u201d These folks are mortgage bankers and do not seem to understand the difference. They have never called the cash out from a forward loan u201cincome.u201d So why do they state: u201cThe HECM product is the only government program that helps senior citizens u2018age in place,u2019 while also providing them income through access to the equity in their homesu201d?rn
    The report states: u201cAdditionally, Congress will need to appropriate sufficient funds in FY 2011 to keep the program available to seniors.u201d Do they understand that appropriations need to be made before the fiscal year begins? Do they understand what went on this fiscal year with no appropriation? This is a very careless statement.rn
    Here is another indication that the MBA has no idea what it is discussing when it comes to HECMs: u201cThe PLF is the amount of money the borrower is eligible to receive, subject to various criteriau2026.u201d Yet in the prior sentence it correctly identifies PLFs as Principal Limit Factors. The MBA does not seem to understand there is a significant difference between the Principal Limit Factors and Principal Limits.rn
    If the MBA wants to represents our interests they need to do a lot better than this report reflects. It is careless and dangerously outdated. It shows no empathy for our situation and could be cited to the detriment of the industry. The MBA needs to get its act together when it comes to HECMs and reverse mortgages generally. If the reverse mortgage industry does not understand we are little more than u201csecond cousinsu201d to the MBA, maybe this report will dispel that myth.rn
    The MBA can and should do much better when it comes to reverse mortgages. It should outshine the largely underfunded NRMLA but it does not.

  • Mr. Veale, The MBA has always been a day late and many dollars short when it comes to defending the Reverse Mortgage industry. nnI agree with your critique and can only write that if the MBA hopes to have any voice in the future of the reverse mortgage industry, they first get their facts straight and then put their considerable muscle behind getting HECMs fully funded. That would go a long way toward proving that the reverse mortgage industry is not an afterthought.n

  • When it comes to HECMs, the report is ridiculously dated. The MBA continues to suggest that taxes and insurance set asides be placed in escrow accounts. It fails to use common terms correctly. The report makes it clear that our industry is nothing more than an afterthought at the MBA.rn
    When it comes to the reduction on PLFs for the current fiscal year the report states: u201cOn the surface, this seemed like a prudent and fiscally responsible move, however, the reduction in proceeds has contributed to the near flat, if not negative, growth in the program following years of steady volume increases. One reverse mortgage lender estimates this change has caused a 20-25 percent drop in HECM transactions.u201d Near flat growth!!!! The report is dated this month, September 2010. We would love it if our growth were simply u201cnear flat.u201d September 2010 is the twelfth month of the pattern and yet they do not understand our volume is not even 70% of what it was for the prior fiscal year. That is history not predictions.rn
    As to the escrow account issue, the report states: u201cu2026participant counseling to include an individual financial assessment and whether or not escrow should be required. The lack of escrow has led to an increase in u2018tax and insuranceu2019 defaults with lenders apprehensive about foreclosure and adverse publicity.u201d Is it a lack of escrow accounts or a lack of a set asides?rn
    The MBA has continually taken the position that escrow accounts are to be preferred to set asides. Why should HECMs accrue interest on amounts held in escrow when set asides have long been the practice with HECMs? The interest earned on escrow accounts will normally be less than the interest that accrues on disbursements for escrow accounts and the interest earned will be taxable as earned while the accruing interest will not be deductible until paid.rn
    The report calls the cash seniors receive from a loan u201cincome.u201d These folks are mortgage bankers and do not seem to understand the difference. They have never called the cash out from a forward loan u201cincome.u201d So why do they state: u201cThe HECM product is the only government program that helps senior citizens u2018age in place,u2019 while also providing them income through access to the equity in their homesu201d?rn
    The report states: u201cAdditionally, Congress will need to appropriate sufficient funds in FY 2011 to keep the program available to seniors.u201d Do they understand that appropriations need to be made before the fiscal year begins? Do they understand what went on this fiscal year with no appropriation? This is a very careless statement.rn
    Here is another indication that the MBA has no idea what it is discussing when it comes to HECMs: u201cThe PLF is the amount of money the borrower is eligible to receive, subject to various criteriau2026.u201d Yet in the prior sentence it correctly identifies PLFs as Principal Limit Factors. The MBA does not seem to understand there is a significant difference between the Principal Limit Factors and Principal Limits.rn
    If the MBA wants to represents our interests they need to do a lot better than this report reflects. It is careless and dangerously outdated. It shows no empathy for our situation and could be cited to the detriment of the industry. The MBA needs to get its act together when it comes to HECMs and reverse mortgages generally. If the reverse mortgage industry does not understand we are little more than u201csecond cousinsu201d to the MBA, maybe this report will dispel that myth.rn
    The MBA can and should do much better when it comes to reverse mortgages. It should outshine the largely underfunded NRMLA but it does not.

  • Mr. Veale, The MBA has always been a day late and many dollars short when it comes to defending the Reverse Mortgage industry. nnI agree with your critique and can only write that if the MBA hopes to have any voice in the future of the reverse mortgage industry, they first get their facts straight and then put their considerable muscle behind getting HECMs fully funded. That would go a long way toward proving that the reverse mortgage industry is not an afterthought.n

  • When it comes to HECMs, the report is ridiculously dated. The MBA continues to suggest that taxes and insurance set asides be placed in escrow accounts. It fails to use common terms correctly. The report makes it clear that our industry is nothing more than an afterthought at the MBA.rn
    When it comes to the reduction on PLFs for the current fiscal year the report states: u201cOn the surface, this seemed like a prudent and fiscally responsible move, however, the reduction in proceeds has contributed to the near flat, if not negative, growth in the program following years of steady volume increases. One reverse mortgage lender estimates this change has caused a 20-25 percent drop in HECM transactions.u201d Near flat growth!!!! The report is dated this month, September 2010. We would love it if our growth were simply u201cnear flat.u201d September 2010 is the twelfth month of the pattern and yet they do not understand our volume is not even 70% of what it was for the prior fiscal year. That is history not predictions.rn
    As to the escrow account issue, the report states: u201cu2026participant counseling to include an individual financial assessment and whether or not escrow should be required. The lack of escrow has led to an increase in u2018tax and insuranceu2019 defaults with lenders apprehensive about foreclosure and adverse publicity.u201d Is it a lack of escrow accounts or a lack of a set asides?rn
    The MBA has continually taken the position that escrow accounts are to be preferred to set asides. Why should HECMs accrue interest on amounts held in escrow when set asides have long been the practice with HECMs? The interest earned on escrow accounts will normally be less than the interest that accrues on disbursements for escrow accounts and the interest earned will be taxable as earned while the accruing interest will not be deductible until paid.rn
    The report calls the cash seniors receive from a loan u201cincome.u201d These folks are mortgage bankers and do not seem to understand the difference. They have never called the cash out from a forward loan u201cincome.u201d So why do they state: u201cThe HECM product is the only government program that helps senior citizens u2018age in place,u2019 while also providing them income through access to the equity in their homesu201d?rn
    The report states: u201cAdditionally, Congress will need to appropriate sufficient funds in FY 2011 to keep the program available to seniors.u201d Do they understand that appropriations need to be made before the fiscal year begins? Do they understand what went on this fiscal year with no appropriation? This is a very careless statement.rn
    Here is another indication that the MBA has no idea what it is discussing when it comes to HECMs: u201cThe PLF is the amount of money the borrower is eligible to receive, subject to various criteriau2026.u201d Yet in the prior sentence it correctly identifies PLFs as Principal Limit Factors. The MBA does not seem to understand there is a significant difference between the Principal Limit Factors and Principal Limits.rn
    If the MBA wants to represents our interests they need to do a lot better than this report reflects. It is careless and dangerously outdated. It shows no empathy for our situation and could be cited to the detriment of the industry. The MBA needs to get its act together when it comes to HECMs and reverse mortgages generally. If the reverse mortgage industry does not understand we are little more than u201csecond cousinsu201d to the MBA, maybe this report will dispel that myth.rn
    The MBA can and should do much better when it comes to reverse mortgages. It should outshine the largely underfunded NRMLA but it does not.

  • When it comes to HECMs, the report is ridiculously dated. The MBA continues to suggest that taxes and insurance set asides be placed in escrow accounts. It fails to use common terms correctly. The report makes it clear that our industry is nothing more than an afterthought at the MBA.rnrnWhen it comes to the reduction on PLFs for the current fiscal year the report states: u201cOn the surface, this seemed like a prudent and fiscally responsible move, however, the reduction in proceeds has contributed to the near flat, if not negative, growth in the program following years of steady volume increases. One reverse mortgage lender estimates this change has caused a 20-25 percent drop in HECM transactions.u201d Near flat growth!!!! The report is dated this month, September 2010. We would love it if our growth were simply u201cnear flat.u201d September 2010 is the twelfth month of the pattern and yet they do not understand our volume is not even 70% of what it was for the prior fiscal year. That is history not predictions.rnrnAs to the escrow account issue, the report states: u201cu2026participant counseling to include an individual financial assessment and whether or not escrow should be required. The lack of escrow has led to an increase in u2018tax and insuranceu2019 defaults with lenders apprehensive about foreclosure and adverse publicity.u201d Is it a lack of escrow accounts or a lack of a set asides?rnrnThe MBA has continually taken the position that escrow accounts are to be preferred to set asides. Why should HECMs accrue interest on amounts held in escrow when set asides have long been the practice with HECMs? The interest earned on escrow accounts will normally be less than the interest that accrues on disbursements for escrow accounts and the interest earned will be taxable as earned while the accruing interest will not be deductible until paid.rnrnThe report calls the cash seniors receive from a loan u201cincome.u201d These folks are mortgage bankers and do not seem to understand the difference. They have never called the cash out from a forward loan u201cincome.u201d So why do they state: u201cThe HECM product is the only government program that helps senior citizens u2018age in place,u2019 while also providing them income through access to the equity in their homesu201d?rnrnThe report states: u201cAdditionally, Congress will need to appropriate sufficient funds in FY 2011 to keep the program available to seniors.u201d Do they understand that appropriations need to be made before the fiscal year begins? Do they understand what went on last year with no appropriation? This is a very careless statement.rnrnHere is another indication that the MBA has no idea what it is discussing when it comes to HECMs: u201cThe PLF is the amount of money the borrower is eligible to receive, subject to various criteriau2026.u201d Yet in the prior sentence it correctly identifies PLFs as Principal Limit Factors. The MBA does not seem to understand there is a significant difference between the Principal Limit Factors and Principal Limits.rnrnIf the MBA wants to represents our interests they need to do a lot better than this report reflects. It is careless and dangerously outdated. It shows no empathy for our situation and could be cited to the detriment of the industry. The MBA needs to get its act together when it comes to HECMs and reverse mortgages generally. If the reverse mortgage industry does not understand we are little more than u201csecond cousinsu201d to the MBA, maybe this report will dispel that myth.rnrnThe MBA can and should do much better when it comes to reverse mortgages. It should outshine the largely underfunded NRMLA but it does not. rn

    • Mr. Veale, The MBA has always been a day late and many dollars short when it comes to defending the Reverse Mortgage industry. nnI agree with your critique and can only write that if the MBA hopes to have any voice in the future of the reverse mortgage industry, they first get their facts straight and then put their considerable muscle behind getting HECMs fully funded. That would go a long way toward proving that the reverse mortgage industry is not an afterthought.n

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