In its final days, April saw showers of news about Ocwen, the multi-state mortgage servicer that responded to its very rough April 20 with a barrage of counterstrikes, including two requests for emergency injunctions and an attack on the constitutionality of its federal regulatory foe.
But the reverse mortgage world had other headlines over the past week, including a potentially misleading spike in the number of complaints regarding Home Equity Conversion Mortgages, and a popular financial news website declaring that the products aren’t for the “stupid.”
Here’s a breakdown of the most popular stories on RMD this week by readership:
Ocwen, Barred from Reverse Mortgage Originations in IL, Strikes Back — The beleaguered West Palm Beach, Fla. servicer fought back against regulatory actions on multiple fronts, filing emergency restraining orders against the states of Illinois and Massachusetts and requesting an early decision on the constitutionality of the Consumer Financial Protection Bureau — in the hopes that a court will invalidate the CFPB’s authority and, in turn, make its federal lawsuit against Ocwen go away.
Reverse Mortgage Complaints Spike, But CFPB Database’s Future in Doubt — The CFPB also makes an appearance in this piece about the hidden story behind a spike in reverse mortgage complaints, which rose by 172% between 2012 and 2016. That may seem like a precipitous rise, but a lawyer from the D.C. firm of Ballard Spahr told RMD that it’s likely a function of increased consumer awareness of the CFPB’s consumer complaint database — a controversial tool that could be thrown by the wayside if Congressional Republicans have their way.
Two Vital Reverse Mortgage Tax Resources — Now that you’ve filed your taxes (hopefully!), tuck into this piece about common HECM-related tax questions, which don’t stop for any official tax-filing deadline. RMD summarizes key points from two essential resources by Michael Kitces and Tom Davison, which explore the common and exotic ways HECM borrowers can extract tax advantages as well as cash from their home equity.
CNBC: Reverse Mortgages Aren’t for the “Stupid” — In what must have been a huge relief for the many Americans that have taken out reverse mortgages, CNBC declared that the HECM isn’t for the stupid in this piece about the ways the program has changed and improved over the years. If it feels like a case of deja vu, that’s because it’s the second time CNBC touted the reverse mortgage in the span of about a week.
What Reverse Mortgage Professionals Could Expect During a Shutdown — As soon as you thought it was safe to assume that the government had avoided its second shutdown in the past four years, President Trump yesterday unleashed a Twitter barrage that preemptively blamed Democrats for shuttering the government just in time for Americans’ spring vacations to national parks. Congress has until midnight Friday to make a decision, and reports indicate that they’re well on their way to a stopgap Friday morning — but in case there are any last-minute hiccups, keep this story handy to see how a complete halt in non-essential government services will affect the reverse mortgage industry.
Reverse mortgages around the web
The Answers to Common Reverse Mortgages Questions — Forbes continues its HECM charm offensive by giving a platform to Richard Eisenberg, managing editor at boomer-news site Next Avenue, to describe a recent National Reverse Mortgage Lenders Association webinar on reverse mortgage questions. As RMD reported, that webinar featured a raft of common misconceptions about the product, which a team of professionals gamely answered for an audience of Next Avenue readers. On Forbes, Eisenberg provides a smart and balanced look at the different reverse mortgage options for seniors, with the obligatory shout-out to the holy trinity of reverse mortgage spokesmen: Fred Thompson, Henry Winkler, and Tom Selleck.
Reverse Mortgage Borrower’s Heir Uses Statute of Limitations Defense — In wonky legal news out of Florida, a circuit court threw out a foreclosure complaint from Reverse Mortgage Solutions on the grounds that the statute of limitations on the action had expired. According to this piece from Lexology’s Consumer Financial Services Blog, the foreclosure proceedings began back in May 2008 after the death of HECM borrower Ruby Hayes; the action was then eventually dismissed in 2013. When a second foreclosure complaint was filed in September 2014, the borrower’s daughter claimed that it was invalid because Florida’s five-year statute of limitations had elapsed the year before — an argument seconded by the court, which ruled against RMS and in favor of the daughter.
AAG Helps New Jersey Woman Save Her Home — Earlier this month, Philadelphia’s Fox affiliate reported on the story of Alice Smith, a Haddonfield, N.J. woman who faced foreclosure on her home after falling behind on her property taxes. In order to help Smith secure a reverse mortgage that she could use to pay her back taxes, friends and neighbors flocked to a GoFundMe page and donated “thousands” of dollars, which Smith’s family used to make the necessary improvements on the home. Once her property qualified, American Advisors Group employee Lorraine Faas assisted Smith with receiving the HECM that has allowed her to remain in her home.
Written by Alex Spanko