Congratulations, RMD readers: You’ve made it to the end of a whirlwind week in the world of reverse mortgages and beyond. Now it’s time to kick back and welcome summer over a long holiday weekend ahead. But before you log off and start sneaking toward the exits as early as your particular office allows, take a quick look at the top stories from the past week — or bookmark this page for Tuesday morning to help clear out the cobwebs.
Which reminds us: In observation of Memorial Day, RMD’s offices will be closed, with no updates on Monday. Our coverage returns Tuesday, May 30. We hope this weekend finds you relaxing with family and friends — and maybe a cold beverage or three.
3. Trump’s HUD Budget: Good for Reverse Mortgages, Bad for Public Housing — Despite being out of the country on his first overseas trip as president, Donald Trump and his administration dropped his full fiscal year 2018 budget plan this week, a stark document that promised vast cuts to most areas of government that don’t involve defense or border security. But in an interesting twist on what was generally a dark week for most industries that work closely with government programs, the Department of Housing and Urban Development had a welcome surprise for the reverse mortgage industry: A call to permanently eliminate the cap on the total number of Home Equity Conversion Mortgages, and a press release that showered almost gushing praise on the program’s role in helping older Americans access their home equity and plan for retirement.
4. Why Closing Costs Can be a Deal-Maker for Reverse Mortgage Borrowers — In an era of rising interest rates, reverse mortgage originators have less leeway to cover closing costs while still maintaining their margins. That’s why it’s important to explain the importance of the various costs — including the mortgage insurance premium — when working with potential borrowers, according to Reverse Mortgage Funding’s Craig Barnes. RMD was there in Huntington Beach, Calif. when Barnes discussed ways to sell reverse mortgages with rates on the rise.
5. Mnuchin: My Team Reported Financial Freedom’s Reverse Mortgage Issues to HUD — Pressed by a Senate committee on his former company’s involvement with reverse mortgages, Treasury secretary Steven Mnuchin remained defiant, insisting that his team at OneWest self-reported the issues at its former subsidiary, Financial Freedom, to HUD and the FHA. Sen. Sherrod Brown of Ohio, a Democrat, went after Mnuchin for his tenure at OneWest and its subsequent corporate parent, CIT Group, calling out the reverse mortgage settlement and accusations that OneWest had “robo-signed” mortgages and foreclosure orders without properly vetting them.
Reverse Mortgages Around the Web
Carson’s HUD to Ease Condo Approval Rules? — In case you didn’t get your fill of HUD, the Washington Post reports that the department might loosen Federal Housing Administration rules regarding government-backed lending on condo properties. HUD Secretary Ben Carson reportedly told a conference of Realtors last week that he supports plans to pare back the FHA’s condo rules, saying he was “in lockstep” with late Obama-era proposals to expand FHA lending to more condo buyers. This would of course be of interest to reverse mortgage lenders, as currently condo owners — or potential HECM for Purchase condo buyers — can only use reverse mortgages in FHA-approved buildings, which must meet government standards of solvency. One of the proposals that Carson seemed to endorse, according to the Post, was the institution of “spot loans,” or FHA-backed mortgages for single units in otherwise non-approved developments.
GSB to Introduce Reverse Mortgages — The latest entry in RMD’s dogged coverage of reverse mortgages around the world comes from Thailand, where the Government Savings Bank plans to introduce reverse mortgages next month. According to Thai news site The Nation — no relation to the American political magazine of the same name, we’re assuming — the reverse mortgage is just one part of the Government Savings Bank’s overall plan to reach out to older customers, with bank president Chatchai Payuhanaveechai declaring that Thailand “is becoming an aged society.” As with an American HECM, heirs of reverse mortgage borrowers will have the option of repaying the loan or allowing the bank to foreclose on the property, the publication notes.
Written by Alex Spanko