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.”
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.