Reverse Mortgage Counselors Association Launches New Borrower Advocacy Group

The Reverse Mortgage Counseling Association (RMCA) will roll out a reverse mortgage borrower group on November 1 it says will serve as a benefit to the members of the group as well as lenders and the public. As a communication channel between borrowers and lenders, the group will allow the association to gather data on reverse mortgage borrowers and their experiences throughout the years they live with their reverse mortgages.

The group, called the Active Life Club, aims to gather borrowers through their lenders and the support of the 300 RMCA reverse mortgage counselors with whom they work. Lenders will be able to pay the first year’s $40 membership for borrowers, who will in turn pick up the annual fee to continue membership over the course of their reverse mortgage loans.

Through the membership, lenders will communicate with borrowers, who will in turn communicate back to the industry through twice-annual surveys and monthly newsletters.

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“By having this communication with members, we’re going to hopefully reduce negative press and reduce the incidence of default in tax and insurance,” says Michael Wallace, newly appointed director of industry relations for RMCA. “The Active Life Club will give a voice to the borrowers,” he says.

The organization will also connect members with products and services that cater to their needs as reverse mortgage borrowers, such as contractors who have proven they understand the needs of this particular demographic.

The monthly e-newsletter communication will maintain a conversation between the lender and borrower, Wallace says, which might otherwise fall by the wayside. And as a neutral third party, the Active Life Club aims to bring a new voice to the table from a policy and public perception perspective.

“If this organization is successful in promoting reverse mortgages as a way to age in place, maybe some of the stigma is going to be taken away and will promote the members to say, ‘Yes, I did it and I’m happy I did it,'” he says. “This group is going to be the voice of the industry from the borrower perspective.”

Written by Elizabeth Ecker

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  • I’d like to understand this a little better.  Are you saying that counselors (or lenders) will provide the information of counselees or borrowers to this organization, which will then institute an on-going communication and marketing campaign to them in partnership with lenders?  What do you mean by “The organization will also connect members with products and services that cater to their needs as reverse mortgage borrowers…”?  This sounds like a lead generation platform and a way for counselors, lenders, and RMCA to generate income.  If that’s what it is, it may not be in the spirit of independent counseling and privacy.

    • Lance,

      Your points are excellent.  Unfortunately I think they will fall on deaf ears.  I hope you will bring them up directly to Peter Bell and Barb Stucki.

  • This really needs to be vetted …there are all sorts of questions of the fees/club/true-mission/contractor-referrals to name a few. This negative stigma that is being sited (promoted for $40+++) is being exploited by the folks that want to profit by it or by others (like on TV) that wish to sensationalize things that they don’t fully understand. The best thing to do in changing a negative paradigm of a product that is fundamentally extremely positive is to educate, educate, and then educate some more …remember many years ago when a ‘2nd mortgage’ meant you were in trouble and then years later ‘Home Equity’ loans become accepted. Perhaps the best course is for FHA/HUD to employ Reverse Experts to travel the country and promote and educate the positives which in time will surely counter this <1% negative-stigma-stuff that gets so much attention.    

  • If there are only 60,000 endorsements this fiscal year, this
    new organization is looking for about $2.4 million on new originations
    alone.  If one includes all current
    outstanding HECMs, the ANNUAL revenues from all loans would be about ten times that
    amount.  Now let us look at NRMLA.  From a copy of its 2009 IRS Form 990 the
    gross activities from all activities (including gross fees from conventions and
    an insubstantial amount of interest income) totaled less than $2.5 million for the
    calendar year 2008 and less than $2 million for 2009.

     

    I agree with Mr. Lance Jackson, this looks like a good way
    to cloud the independence of lenders and counseling agencies.  The services look meager for the price.  Would borrowers have the expectation that lenders will pick up the membership
    cost in the future?

     

    So what is this new organization going to do for us?  Provide communication between lenders and borrowers.  What will the profits from this organization
    go for?  Will they be used to supplement
    the counseling organization?  Will it pay
    for part of the salaries of those who run the counseling association?  They provided little information on their
    operations and are asking a huge sum of money to do little to nothing other
    gathering statistics.  No doubt this is a
    group of people with the best of intentions for their organization but that
    does not make it good for lenders or our industry.

     

    Why not just hire a CPA firm who would sign a letter of
    confidentiality to do the same?  They
    would have far more to lose by breaking their confidentiality agreement than
    this organization.  The cost would be about the same and our industry would control what was said and how it was
    stated.  My old CPA firm provides
    confidential services to the radio industry on a wide range of services.  There are others who do or could do the same.

     

    The last troubling issue is their recommended list of
    product and service providers.  This will
    be another source of revenues.  It is
    also a potential source of problems.  All
    there needs to be is a single bad apple in that group and it could create
    problems for everyone involved.  What
    standard would apply to get on “the list”?

  • Seems to me that it is the borrowers that need the services to help them stay in their home.  It looks like a good fit to have counselors at the ready and up to now Lenders have not traditionally done a good job of creating any good will with the borrowers.  I believe this will be that vehicle. Good luck with the endeavor.  I hope the lenders out there support it so that everyone can see the benefit where it is really needed …the borrower.

  • I heard a very detailed explanation of the program and in addition to helping the consumer and, in turn the industry, it is a cost-effective way to stay in touch with past customers.  We are looking forward to becoming part of this.

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