CFPB On Reverse Mortgage Deadline, Calling on Lenders

The Consumer Financial Protection Bureau is under way with a reverse mortgage study that has the potential to drive regulation in the coming year. In its first-ever annual report to Congress, the new bureau noted work on the study, in addition to a separate research endeavor that seeks to determine best practices for financial advisors who work with older Americans.

“The reverse mortgage study is in progress and we are working to meet the July 21 statutory deadline,” a CFPB spokeswoman told RMD in an email. “We have started to reach out to industry participants for information, and we will continue to do so over the next several months.” That study is being conducted by the bureau’s Research and Markets team, and is a stipulation mandated by Dodd-Frank, which also specified the creation of the agency when it was signed into law in July, 2010.

A separate effort is also under way by the CFPB’s Office of Older Americans to protect older consumers with regard to financial products. That office, established in October, is led by director Skip Humphrey who told RMD in a press call upon his appointment that the office will work toward protecting seniors’ homes.


“Recommendations on best practices concerning financial advisors who work with older Americans is a separate effort and work on those recommendations is underway,” the spokeswoman told RMD. “More details about both efforts will be announced when this material is ready for public dissemination.”

Until then, reverse mortgage advisors and “industry participants” may receive calls from the CFPB on their practices for research purposes. The agency has not specified whom those participants will be.

Additionally, the agency’s enforcement of regulations concerning non-bank lenders could warrant separate visits from the CFPB, with that enforcement being projected to begin any day.

Written by Elizabeth Ecker

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    • Truer words could not be spoken. Those of us who were “participants” long before the days of remote origination and mega companies representing the standards of the industry might have the input they’re looking for.

  • The CFPB, my favorite subject! 2012 is going to be a very interesting year. I fear we will see the CFPB interfere in the life’s of many of our seniors as well of the lives of the American people in general.

    Here we have an institution (CFPB) with an unlimited amount of authority and power that is going to make decisions on what is right or wrong for many seniors through out our nation that have been through three or more wars! Seniors that have fought and served our country, seniors that have have been through decades of change and many seniors that know a great deal more about what thier needs are than any of these members of the CFPB ever thought of knowing. This really makes sense, this is what it has come down too!

    I also fear for our community banks around the country and the even more nightmare regulations that will be imposed upon them in 2012. This will mean more bank failures and small businesses failing along the way.

    Yes we are in for an interesting 2012. We have much to fear over what the CFPB has in store for us?

    John A. Smaldone

  • I believe those of us in the RM business should contact the OOA. They need to come out and go on calls with RM originators and meet the seniors and families , so they get a good idea of how important the RM program is and how much impact a RM has on them. They need to look at the GOOD that RM causes, instead of focusing on the bad.

  • Everyone needs to take a deep breath.


    The CFPB is now a fact of life.  While it is perfectly all right to rail
    against it, perhaps lowering the fear factor in this context will lead to a
    more reasoned conversation about an organization which has a mandate from
    Congress to provide a document on reverse mortgages with specific topics.


    The head of the Office of Older Americans is someone who
    does not have a reputation of being a zealot or radical.  Skip Humphrey is a life long liberal Democrat
    with views in line with his father and mother (and AARP).  If he is actively overseeing this study, one
    would expect it to read exactly as the vast majority of consumer advocates view
    our product, a loan of last resort.


    Beating our heads against the wall telling bureaucrats that
    they need to walk a mile in our shoes is an exercise in futility.  They have been assigned the responsibility to
    research and based on that research report to Congress.  They will do what they do.


    Realize the CFPB might talk to us lowly originators but do
    not expect it.  Most likely they will be
    taking testimony from industry execs, the modus operandi of bureaucrats.


    The CFPB is the brain child of Elizabeth Warren (the last
    name of some man she was once married to before her current husband, Bruce Mann,
    back when she was a Oklahoma born Republican going
    to college at the University
    of Houston).  Mrs. Mann most likely approved all of the hiring
    of the employees who will be working on this project other than Skip.  The former Ms. Herring (I am now confused by
    all of her last names and political party affiliations) was somewhat known for
    saying that she was “not fond” of reverse mortgages.  This is the secret lingo of senior (consumer)
    advocates which means that reverse mortgages are a “necessary evil” and a loan
    of last resort.


    Do not think that by introducing consumer advocates to
    a few happy borrowers their prejudice will magically melt away.  While that might help to tone down negativity
    in the report, the report will present the old and discredited cases of the
    past plus the more legitimate negative claims of some borrowers and their
    families.  It will no doubt also point
    out that most borrowers seem satisfied and will go on to conclude whatever the
    current bias of the authors is which will no doubt reflect the thoughts of Ms. What’shername
    and her peers.  Since Skip has a
    significant stake in AARP, no doubt the study will address the non-borrowing

  • aliasBob,

    Except for your sentence we agree.  Was the reason Wells left the industry a result of over regulation?  To me it was a matter of non-responsive regulators. 

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