SAN FRANCISCO — Department of Housing and Urban Development secretary Ben Carson, along with the rest of the agency, remain committed to making the reverse mortgage program financially sound and sustainable, officials said Monday.
Speaking before the National Reverse Mortgage Lenders Association’s annual conference in San Francisco, Cheryl Walker and Kasey Watson walked through the current state of the federally backed reverse mortgage — including Carson’s stated support for the program in the past year.
“Since you have seen his remarks, and he has spoken about the HECM program — not just in confirmation hearings, but in public forums — he has expressed his commitment to the program,” said Walker, director of the Office of Single Family Program Development’s Home Valuation Policy Division.
“We’re just doing our best to utilize the tools and resources that are available to us to make sure the program is a sustainable one in the long term,” Walker said.
Walker was responding to a line of questioning from NRMLA president and CEO Peter Bell, who pointed out Carson’s public support for the Home Equity Conversion Mortgage in a July speech to LeadingAge Florida, a trade group that represents non-profit elder care providers.
“I have never before heard a secretary, particularly a new secretary early in their administration, provide such an affirmation of support to the concept of reverse mortgages,” Bell said.
Other HUD Highlights
The industry will continue to wait for an updated HECM section within the Single Family Housing Policy Handbook 4000.1, which was originally slated for release this past summer. Instead, the section — which will provide a single resource for reverse mortgage origination and servicing regulations — will not come out for at least six months, Walker said, with an expected delivery date sometime in 2018.
The shift in presidential administration was partially to blame, Walker said, as a wider group of individuals must review the language before the final report is issued.
Walker also touted recent changes to the HECM for Purchase requirements, which now allow borrowers to submit an initial application before the completion of counseling and the receipt of a certificate of occupancy.
“I think that has addressed many of your concerns around the H4P transactions,” she said.
However, Walker warned that new homes must still be completely finished before an appraisal can be submitted to HUD.
“This has not changed,” she said. “It is the appraisal that determines the status of a property as completed, in-progress, or proposed.”
The department has also observed a significant rise in loans hitting 98% of their maximum claim amounts and seeing reassignment to HUD, echoing others in the private sector who have observed this trend.
Watson, program director of the National Servicing Center’s Servicing Branch in Tulsa, Okla., noted that the amount of loans assigned to HUD in October 2017 alone — 2,483 — exceeded the yearly total seen just six years ago, with a little under 30,000 received in fiscal year 2017 in all.
“That’s a tremendous increase in assignment requests in the course of five years,” Watson said, adding that the department expects the trend to continue over the coming years.
Written by Alex Spanko