WSJ Video: Reverse Mortgages and the Housing Debate

The Wall Street Journal’s James Freeman sought answers on the Federal Housing Administration’s role in the reverse mortgage industry in a video segment this week. In an interview with the National Reverse Mortgage Lenders Association president and CEO Peter Bell, Freeman explored details of the program, FHA’s role, and whether the private market may make a comeback for reverse mortgages.

“The government plays a lot of roles,” Bell said. “It provides a credit enhancement…it gives clients the assurance that what they’re doing is something somebody has thought through.”

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Freeman asked whether reverse mortgages fall into the same debate as other areas of housing.

“If people are in more house than they can afford, doesn’t it make sense that they sell the house and move to an apartment?” he asked.

Bell further defended the program and the lack of options for many seniors who don’t have the retirement income they expected they might have.

“In many cases, [moving] is just not an option for them,” he said.

Written by Elizabeth Ecker

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  • Another know it all that doesn’t understand the real need of the product.  He tried to reduce it, to trivialize it.  Good job Peter- non combative, you kept emotion out and common sense prevailed.

  • Refocusing the discussion from one of lending and housing generally to the concept of funding longevity was excellent.  Personally, I question the strategy of emphasizing the ideal of being self-funded since HUD has allocated funds to the HECM program in the last two fiscal years.
     
    As Peter spoke, he scored great points by not trying to make the HECM into a mystical equity release or equity conversion product but by addressing it as the nonrecourse deferred payment mortgage it is.  By doing this it was easier to describe why the FHA guarantee is still needed.   
     
    Peter did the right thing to emphasize the desire to see the proprietary product area grow.  It was great he refused to succumb to the argument that seniors should just get over it and downsize.
     
    All in all Peter did a great job!!!

  • Refocusing the discussion from one of lending and housing generally to the concept of funding longevity was excellent.  Personally, I question the strategy of emphasizing the ideal of being self-funded since HUD has allocated funds to the HECM program in the last two fiscal years.
     
    As Peter spoke, he scored great points by not trying to make the HECM into a mystical equity release or equity conversion product but by addressing it as the nonrecourse deferred payment mortgage it is.  By doing this it was easier to describe why the FHA guarantee is still needed.   
     
    Peter did the right thing to emphasize the desire to see the proprietary product area grow.  It was great he refused to succumb to the argument that seniors should just get over it and downsize.
     
    All in all Peter did a great job!!!

  • Refocusing the discussion from one of lending and housing generally to the concept of funding longevity was excellent.  Personally, I question the strategy of emphasizing the ideal of being self-funded since HUD has allocated funds to the HECM program in the last two fiscal years.
     
    As Peter spoke, he scored great points by not trying to make the HECM into a mystical equity release or equity conversion product but by addressing it as the nonrecourse deferred payment mortgage it is.  By doing this it was easier to describe why the FHA guarantee is still needed.   
     
    Peter did the right thing to emphasize the desire to see the proprietary product area grow.  It was great he refused to succumb to the argument that seniors should just get over it and downsize.
     
    All in all Peter did a great job!!!

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