What reverse mortgage professionals want to hear in New Orleans

Reverse mortgage professionals attending the industry’s annual meeting in New Orleans this week will hear pre-planned discussions of new regulations, new products and new counseling protocols, among other topics. They also will be mingling with one another – catching up on industry occurrences, looking for answers and sharing ideas at a time of considerable change.

“By far the most important topic is the TPO [third-party originator] issue,” maintains Dennis Haber, executive vice-president, Agency for Consumer Equity. “Sadly, to date, there has been total silence on this important issue,” according to Haber, who wants to hear about the “practical considerations that correspondents need to be aware of. Hopefully much light will be shed on this topic” at the meeting, he says. Haber also hopes wants more discussion of federal regulatory reforms, “such as the Consumer Financial Protection Bureau, which will really impact the future federal regulatory environment.”

Joshua Shein, managing partner, Great Oak Lending Partners, says “many of us are interested in understanding more about the current uncertainty and fluctuations in the market with regards to the pricing of the loans. The big question,” he believes, “is how much more movement will there be and where will it end up?”


Jeffrey S. Taylor, chairman, RMI-Reverse Market Insight, Inc., tells RMD that he expects “a major topic” for the meeting to be the new HECM counseling protocol. “What will the impacts be to the new HECM counseling wait times and potential rise in cost?” he wonders. And, “with the T&I [tax and insurance] defaults becoming more of a default counseling resource issue,” Taylor asks: “Will the existing counseling resources be compromised from new origination counseling towards default counseling?”

Meeting in a city drenched in culture and history, reverse mortgage professionals will hope to come away with a stronger idea of whether and when their sector will live up to the considerable potential they regularly hear so much about.

Written by Neil Morse

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  • Counseling protocol, really? TPO to some degree. Pricing is terribly important.

    Perhaps the one subject that needs to be discussed on an industry wide basis is the value of HECM Savers. Mutually addressing this issue seems an important way to gain market attention and market realization of how this product will bring a less costly answer to the problem of cash management.

    Growth of this product is crucial in providing the HECM program the profits FHA needs to increase principal limit factors and lower the ongoing MIP in the future. While learning is important, mutual cooperation in gaining market penetration seems to be the most important need. Unfortunately it seems as if this opportunity will be lost and we will once again experience what can best be described as blind groping.

  • As for me, I would like to hear what the Association is doing to attract secondary market investors. Five years ago, we had one outlet, Fannie Mae. Fast forward to today and we only have one again, and that is Ginnie Mae. Compunding the problem is that Ginnie Mae has suspended HMBS Issuer approval for ten months and there doesn’t seem to be any end in sight to this moratorium.

    We are not in a good place right now with the entire industry hanging on by the thread of GNMA.

  • November 1, 2010:
    As stated in ReverseMortgageDaily.com (Oct. 31. 2010), “What reverse mortgage professionals want to hear in New Orleans,” states:, “Reverse mortgage professionals attending the industry’s annual meeting in New Orleans this week will hear pre-planned discussions of new regulations, new products and new counseling protocols, among other topics.” This is true.

    But what those NRMLA conference mortgage professionals WON’T hear is that none of these home equity conversion mortgage (HECLM) packages include stock cooperative properties. This is—as the HUD Secretary declared about the nation’s epidemic of home foreclosures—a “shame.”

    In today’s recession economy, co-op property owners aged 62 and older cannot retrieve their hard-earned dwelling-unit equity. Thus they suffer economic hardships so severe that many are threatened with loss of their unit. The U.S. Housing and Economic Recovery Act of 2008 (HERA) has yet to cover a home equity conversion mortgage(HECM) for co-op owners, and this is the reality of HERA shortfall:

    1. In 2008 HERA as passed by Congress and signed by President George W. Bush directed implementation of HECMs for “single family, condominium and stock cooperative” dwelling units. Subsequently, the U.S. Department of Housing and Urban Development (HUD) implemented several HECM packages for single-family and condominium dwelling units, while their stock co-op neighbors still await action.
    2. The HERA directed that a HUD-certified housing counseling program be implemented within 12 months of the Act. This was done for single-family and condominium dwelling units. Unfortunately, for over two years, stock co-op owners have continually pressed lenders and HUD officials to implement HECM loans, only to receive continual responses of “soon.”
    3. Unofficial justification for this elder financial neglect has been that implementation of HECMs for co-ops is a “complex” issue that demands resources “unavailable” at this time. Yet during this same period, government HECM experts have managed to implement not one but two HECM packages, with several options, for single-family and condo units, along with “complex” HECM ever-evolving counseling protocols.
    4. Also, HUD issues almost weekly press releases about new and innovative HECM activity that never includes the HERA requirement for co-op implementation. The HUD Secretary declares that HECMs for co-ops implementation is only “discretionary.” Something that “may” or never be implemented.

    Perhaps HECM implementation is truly discretionary because a HUD-directed Census Bureau report found only 429,000 co-op owner-occupied dwelling units nationwide, instead of some millions of units as with single-family and condos? Does this mean that those seniors aged 62 and older in co-ops fail to be as economically stressed? Hardly so!
    Elder co-op owners suffer when food prices, medical costs and home maintenance needs increase just as they do for single-family and condo owners. Co-op owners receive no Social Security increases for two years just as all dwelling owners do. Co-op owners have suffered economy-driven loss of retirement and investment funds the same as any others in their age group. And some in one Southern California community with homes with evaluations from $100,000 to $500,000 cannot reach their equity because HECM loans are unavailable.

    Co-op owners and their millions of concerned family members are aware of the 2010 New Orleans NRMLA conference. Southern California lenders who frequently talk to these co-op owners eagerly awaiting a HECM package. They are expecting that expert NRMLA mortgage conferees would have some conversation about HECMs for co-ops.

    Please believe that co-op dwelling owners are relying on you. We know that where there is a will there is a way for mortgage experts to creatively develop at least one HECM package suitable for moderate- to low-income co-op dwelling owners.

    Barbara B. Howard
    Cofounder HECMs for CO-OPs GROUP at Laguna Woods CA

    M.A. Conflict Management & Gerontology
    MEDIATION & Change Management™
    http://ChangeManager-ADR.net/ • 949 855.3990

    • Barbara,

      If you believe that the industry does not talk about the issue with great frequency, you obviously do not know the industry. It is highly unlikely there will ever be an entire session on coops by themselves at NRMLA but they have been discussed at almost every meeting I have attended on industry updates since July 2008 and even a year earlier.

      We want the business but it may never happen even if HUD issues an implementing Mortgagee Letter. Hold tight; it could be a rough ride.

      For your information HERA also repealed a provision related to long-term care insurance that HUD never implemented. It became law in 2000 but HUD believed it was not feasible so Congress eventually repealed it.

      I wish it had been financially possible for the condo conversions to have occurred at Laguna Woods.

      There are several manufactured home parks in Southern California whose real property interests are bound up in coop ownership and thus are not eligible for HECMs. We hear from several of them as well quite frequently..

  • Unsure why many are attempting to have the HECM saver be our savor? I see comments “How to market the HECM saver”, “where to take the message” and “how we can develop and grow the saver”.

    – Except less fees and lower LTV that is it.

    Its the same as its always been with lower fees and less $$. Not sure why some within our industry are pretending like we need to now reinvent the wheel? We do now have more options with the saver and talking points but really nothing new that we need to do. Same marketing, same referral sources and same product with lower fess and less money for our clients.

    • 2545,

      If we had no Standard, we would have a far more microscopic industry. The Saver is not our savior but COULD BE a game changer. There is no pretense. If you don’t see it, don’t worry about it!!

      Savers are the first HECMs we have had to reach a segment of seniors. Market pricing will determine how effective Savers will be in this regard. If market pricing is materially lower for Savers than Standards, there was nothing to see. However, if the pricing is equal to or close to it, the secret will all be in the marketing to the demographic segment, not the product — but the modification of the product makes it a far better opportunity.

      At least two of the big banks are already trying to reach out to the segment in Southern California in exactly the way one would expect; it is tired and needs extensive revamping. It seems they will need to reach out to a different breed of originator and have not, although they may be in the process.

      Fixed rate HECM Savers are nothing more than fixed rate HECM Lite Standards with the few changes you correctly state — but adjustables are different. You are the model of exactly why we need the existing pool of originators along with a new breed of originators in the industry who understand the use of adjustables as cash management tools. However, don’t lose sight that your comment could end up being right on point in several ways. So if you were not stirred up by the product, keep doing what you are doing and don’t get overly distracted. It all could be for naught.

      • The Cynic,
        I also am in Southern Cal and have not witnessed the big banks attempts at marketing to “the segment”. By the way what is “the segment”? Is it those who in the past said the reverse mortgage is too expensive…is that “the segment”?

      • 2545,

        It is much broader although cost sensitive seniors are a clear subset.

        Again it is not all big banks, just two. One presented their new emphasis at the NRMLA Irvine Road Show and the other is increasing their efforts in reaching out to professional gatekeepers.

        Again the product provides the means and the grounds to step up marketing efforts to a segment whose precise characteristics are continuously being refined. There is little secret sauce. It is one of those vision things. If you need it explained, you missed it but should easily grasp it “IF” and as it grows. But again unless pricing is right, it might only remain a dream not a worthwhile vision to begin with.

        You have the clues and since you have been in the business for awhile, you should have absolutely no problem putting it all together. If not, keep doing what you are doing.

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