Coalition Visits Capitol Hill, Stresses Future Role of HECMs and Counseling Funds

As the fighting over the future of the country continues in Washington, members of the Coalition for Independent Seniors spent time in the Capitol before the summer recess, where they stressed the importance of reverse mortgages in the coming years.

At the end of July, seven CIS board members consisting of reverse mortgage lenders gathered in Washington, D.C. for 17 meetings with representatives on the Hill. During the meetings, members had two goals: first to continue educating Congressional staff on the important role of reverse mortgages, and second to restore funds for HECM counseling.

“We’re meeting with these people to make sure they understand the value proposition of reverse mortgages,” said West Richards, Executive Director of CIS. “We need to make sure they realize why the product is so important today and tomorrow.”

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Progress has been made in educating policy makers in Washington, but the trip continued to focus on informing staff and Congress on the role reverse mortgages play in helping seniors, said Richards.

“It’s still remarkable how many offices remain confused or unaware of the reverse mortgage program and the role it plays in helping seniors.”

While there were questions about the recent exits of Bank of America and Wells Fargo from the business, the topic wasn’t as much of a concern as CIS had anticipated.

“[We stressed that] the product has been around for over 20 years and there are still plenty of companies dedicated to the industry,” he said. “Those [Congressional staff] that did have some concern walked out of the meetings feeling more comfortable than before.”

The conversations mainly focused on the importance of restoring funding for HECM counseling. In April, Congress removed $88 million for counseling in an appropriations bill to avoid a government shutdown and as a result, all of the HECM counseling and other foreclosure assistance funds provided by the Department of Housing and Urban Development were eliminated for fiscal year 2011.

With counseling funds expected to run dry starting October 1, CIS said it has aligned with the National Council on Aging to try to get the funds restored. Richards said CIS is concerned that without funding, the quality of counseling provided to seniors could deteriorate because agencies won’t have the resources to properly train the counselors on the product.

“When you reduce the funding for HECM counseling, you will likely reduce the number of counselors that are qualified,” he said. Less trained counselors could create problems for seniors who are trying to schedule a session and could lead to longer wait times.

Discussions with different committees seem to indicate there is a possibility that funding could be restored in some form, Richards said.

Part of the problem lies in the fact that the funds were lumped together with the $88 million from HUD that encompasses all forms of housing counseling. Getting both the House and Senate to agree that all of the funds should be restored will be difficult, he said.

CIS said it will continue to work with Washington to restore funds for HECM counseling and to stress the importance of FHA’s reverse mortgage program when Congress returns from recess in September.

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  • It is a huge mistake for our industry to align itself with a
    single counseling entity.  That is ill advised.  Even though NCOA is
    technically a tax-exempt organization and has no “shareholders” does
    not mean it is not a profit making organization.  NCOA has its own agenda
    which is not always in line with the interests of our industry.

     

    It is unbelievable that these individuals would go to
    Capitol Hill supporting total funding of counseling programs.  We should only go supporting the portion
    needed for the HECM program.  We are
    somewhat experts in that area but not in the other programs.

     

    The Coalition looks as if it is an ol’ boys club which is
    trying to do the right thing but does not have the expertise to pull it
    off.  There are ten of thousands of these
    organizations throughout the country.  Does
    our dinky industry really need one of its own?

     

    It is one thing to feel as if something was accomplished and
    quite another to accomplish something. 
    While I support the concept, this coalition has yet to show they
    understand the need and how to get it done. 
    Until that day comes, it might be better if they just go and explain the
    HECM program to members of Congress.

  • After reading this, I can only say that I support what the Critic has said 100%! I don’t have anything else to ad as strange as that may sound coming from me!Thanks,John A. Smaldone

    • John,
       
      Thank you for your comment. 

      While my comment may be more caustic than some believe warranted, it is written that way because well intended individuals sometimes do more damage than they even realize and merely being polite does not get their attention.

    • John,
       
      Thank you for your comment. 

      While my comment may be more caustic than some believe warranted, it is written that way because well intended individuals sometimes do more damage than they even realize and merely being polite does not get their attention.

  • After reading this, I can only say that I support what the Critic has said 100%! I don’t have anything else to ad as strange as that may sound coming from me!Thanks,John A. Smaldone

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