Trump Taps Montgomery for Second Stint as FHA Commissioner

President Trump this week announced his intention to nominate Brian Montgomery for a second tour of duty as Federal Housing Administration commissioner, the White House said in a statement.

Montgomery, who had previously served as FHA commissioner in the George W. Bush administration, currently works as the vice president of the Collingwood Group, a Washington, D.C.-based advisory firm. He additionally served the younger Bush as a deputy assistant to the president, and directed the Office of Cabinet Affairs.

Montgomery has also been something of a Home Equity Conversion Mortgage advocate both in and out of public service. During his first tenure, the FHA rolled out the HECM for Purchase program, which Montgomery touted in testimony before Congress in February 2007.

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“Our HECM program shouldn’t just allow seniors to take cash out of their current homes, but should permit them to move to housing that better meets their needs as they age,” he said.

A few years later, while at the Collingwood Group, Montgomery wrote a post about the importance of the reverse mortgage to certain seniors’ overall financial wellbeing.

“There is no escaping the fact that the reverse mortgage product helps address a growing concern: How can we better ensure that the nation’s growing population of seniors will be able to age in a comfortable and secure environment? What better place to do that than your own home?” Montgomery wrote. “For many families, a reverse mortgage is a win-win.”

“The reverse mortgage product has at its very core an essential social purpose,” Montgomery continued.

He also quipped in a 2015 interview that he’d let his own mother take out a reverse mortgage if it made sense for her.

“I told her that I was her son and would always be looking out for her best interests,” Montgomery told The Mortgage Reports’ Tom Kelly. “I also told her that I administered the program for the United States of America and thought it was a pretty good idea.”

Last fall, Montgomery also recommended the transfer of the HECM program from the Mutual Mortgage Insurance Fund into the General Insurance/Special Risk Insurance Fund — an issue that could become more important now that the Department of Housing and Urban Development has made key program changes in the name of shoring up the HECM portion of the MMI.

Trump’s announcement comes amid multiple media reports of disorganization and restlessness at HUD, which remains without a several key leadership positions below secretary Ben Carson. Pam Patenaude, who was nominated for the deputy post back in April, still awaits confirmation from the full Senate.

The industry response has so far been positive, with National Reverse Mortgage Lenders Association president and CEO Peter Bell congratulating Montgomery in a statement.

“Brian has proved himself to be a thoughtful and committed public servant who rolls up his sleeves to get results. As FHA commissioner during the Bush administration, Brian showed extraordinary competence in his management and oversight of the HECM reverse mortgage program,” Bell said. “NRMLA and the industry look forward to working with him upon his return to FHA.”

The Mortgage Bankers Association also applauded Montgomery’s nomination.

“His previous experience will serve him well in this position,” president David Stevens said in the statement. “I hope the Senate will move quickly to confirm Brian and we look forward to working with him, Secretary Carson, and others in the administration to ensure a strong, robust FHA program that can serve its mission of providing affordable housing opportunities.”

Written by Alex Spanko

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    • ravens911,

      You just don’t get it do you?

      If HUD did anything close to that, it would be nullifying the premiums paid by HMBS buyers. Those buyers pay those premiums based on HECMs earning interest in their REMICs and REITs for their estimated life.

      If you want to kill the HMBS secondary market, get this done but if not, don’t. I am just glad it is not the choice of someone so ill informed.

  • Not sure it would have made a difference, but wish this was done awhile ago when they were discussing all the changes that go into effect Oct. 2. At least there would have been someone with experience and knowledge of the program. Again, not saying it would have made a difference as if the administration wanted cuts, they were going to get cuts. It just might have been a little easier to swallow knowing that at least there was qualified representation present in the discussions.

    • EricSD,

      If anything Mortgagee Letter 2017-12 has been needed for about 5 years. To make a mistake and needing a year to correct it is not ugly as needing 5? Had it been done 5 years ago, the drop in the floor could have been far less radical but the decision to bifurcate the upfront MIP was bad policy on 10/4/2010 and even worse, far worse, on 9/30/2013.

      No doubt, HUD woke up to the FACT, that the actuaries were forecasting a $1.2 billion loss the NEW book of business endorsed during fiscal 2017 in its fiscal 2016 actuarial review. Most likely HUD is just realized that the loss is even worse than the actuaries indicated it would be.

      Don’t be fooled, financial assessment has not stemmed any significant loss in the MMI Fund. It was NOT written for that purpose. It was a demand from HECM lenders needing to save face from further foreclosures on HECMs with high propensity for default on property charge payments. Even HUD wanted relief from this source of foreclosure as well which seems very evident by the length of years that LESAs were constructed to cover.

      In Peter Bell’s descriptions of the original design HECM program in the last 30 days or so, one noticeable term has been dropped —- SELF-SUSTAINING —- even though he does use the term sustaining. The difference is that the HECM program can survive even with some losses but it cannot go back to being self-sustaining, $15.2 billion in estimated losses on just those HECMs endorsed between October 1, 2008 and September 30, 2017 is just TOO MUCH to make up.

      The changes that will take place on 10/2/2017 will ONLY stop the losses predicted for the HECMs that will be endorsed during fiscal 2018. Not even HUD is dumb enough to believe that financial assessment is anything but inept and impotent to come close to mitigating those losses but many of us are!!! We are stinking gullible, it is pathetic. We may know a little bit about marketing but we only prove that we are incapable of making financial advice. We just do not get it.

    • John,

      It seems as to MIP and interest rates, backwards seems to the direction we are going. Maybe as to these things and endorsements, backwards is not as bad a direction as some make it out to be.

  • As a Republican it is a joy to see Brian Montgomery being nominated. Even President Obama seemed to have approved of how well he did as an office holdover as requested by the new President back in 2009. Even most lenders seemed to respect him.

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