In the absence of large banks from the reverse mortgage business, will the industry’s approach in Washington, D.C. need a revamp?
The National Reverse Mortgage Lenders Association has long been the industry advocate in Washington, and a recent push from the Coalition for Independent Seniors has also presented an extra boost of industry support. Whether the groups will change their approach on Capitol Hill given the large bank brand power the industry now lacks remains to be seen, but industry advocates say their efforts will not suffer as a result.
“The big banks leaving does not change how we deal with HUD,” Peter Bell, president and CEO of NRMLA told RMD in an email. “The issues remain the same.”
The issues may be the same, but the leadership surrounding the reverse mortgage program certainly has shown some change. Absent a permanent Federal Housing Administration commissioner and with a brand new Consumer Financial Protection Bureau chief, and staff for that matter, industry advocates will need to learn new names in Washington, and show them the ropes of reverse mortgages.
The ongoing changes may not be such a bad thing, says Jeff Lewis, chairman of CIS.
“There has been some turnover in Washington, but it appears the CFBP is going to engage in its [reverse mortgage] study and I imagine we don’t hear too much from them until they do that study,” he says. “The industry is strongest when consumers feel safe dealing with us. This agency will help that.”
The loss of large banks is something to acknowledge, Lewis says, but their influence from a regulatory perspective has always been different from the smaller players.
“Any time you have such a significant part in the marketplace leave, there’s a variety of perspectives to be addressed,” Lewis says. “There’s the reflection as to product perception and reflection on the marketplace. We have spent a fair amount of time speaking to stakeholders and NRMLA has done that as well. We are letting them know the people who are still here need to pick up the slack and keep the product going. We’re going to continue that.”
Wells Fargo, he says, was not so active in lobbying for the industry in particular with its dozens of businesses and giant size. The approach of the remaining players is different, he says.
“We have to be on every single issue quite aggressively. They don’t necessarily have the same urgency as we do,” he says of the large bank lenders.
In terms of the changing faces in Washington, the industry has expressed support of personnel changes at FHA. NRMLA issued a strong statement of support upon the appointment of Carol Galante as acting FHA commissioner, and has held meetings with Karen Hill, who now serves as FHA’s director of single family program development.
“At the end of day, we want an environment where [consumers] are safe,” Lewis says. “If we can make it safer, that’s a good thing. With respect to changes in FHA, we didn’t work with Commissioner Ryan for too long, but he was doing a great job. It appears that Carol Galante and Karin Hill will be terrific. We all look forward to working with them.”
With regard to the pending HECM financial assessment that FHA has been working on in recent months, Lewis says the best approach will be for lenders to use the tools available currently to assess borrowers’ ability to meet their loan obligations.
“I think the best approach initially will probably be that the community starts to take a more active role in differentiating our customers,” he says. “We can do it with what’s available to us…that will take care of most of what needs to be done in terms of making sure those who shouldn’t be getting [a reverse mortgage] aren’t getting one.”
Written by Elizabeth Ecker