Editor’s Take: Reverse Mortgage Industry Can’t Bite the Helping Hands Reaching Out

I’ll start off this piece with a disclaimer: I have only covered the reverse mortgage industry for this publication for about a year and a half. I earned a bachelor’s degree in print and multimedia journalism, not finance, from a small liberal arts college that didn’t have anything close to a math or economics department. I’m about 33 and a half years away from meeting the minimum age to qualify for a Home Equity Conversion Mortgage, and I still have to look up old mortgagee letters and info notices pretty much every time I write about a policy move.

But that doesn’t mean I can’t have an opinion on the program and the various efforts taken to improve and expand its reach during my time on the beat — and that’s something that seems to create controversy in the industry and our comment section.

Take, for instance, the recent report from the Brookings Institution that I covered for RMD. In that document, a pair of independent researchers argued that the HECM program was vital for the retirement outlook of equity-rich, cash-poor Americans — a talking point straight from the reverse mortgage industry playbook. In order to reach a broader swath of retirees, the writers suggested a spin on the HECM Saver program, postulating that lower-risk borrowers should be able to access relatively smaller portions of their home equity in exchange for lower mortgage insurance premiums and fees.


The writers even discussed how HECMs can form one of the “legs supporting the retirement stool,” a visual that no less of an industry authority than American Advisors Group has used to advertise its reverse mortgage options through spokesperson Tom Selleck.

And yet the response from RMD readers didn’t really focus on the fact that a prominent Washington, D.C. think tank was endorsing the HECM and offering a solution to some of the barriers that potential borrowers might face. Instead, more energy was directed toward the way the writers simplified the explanation of how a HECM works, as well as how potential borrowers might react to such a public criticism of the program as it currently stands.

This is not how a mature industry functions; this is closer to biting the hand that’s been extended to help you.

This publication has covered the ways that open, honest acceptance of the HECM’s flaws and formerly lackluster reputation has helped move the industry forward. Only by acknowledging the faults have savvy lenders and originators been able to prove the product’s worth to the specific borrowers for whom it was originally designed.

At present, the HECM industry continues to sort out the long-term effects of the October 2 rule changes. Lower principal limit factors and an updated MIP structure have plunged origination volumes to cycle lows, and there are fears that the reverse mortgage may be reverting to a product of last resort instead of a proactive retirement option.

That’s why the industry lashing out at a good-faith plan to develop new revenue streams and opportunities makes no sense to me. Big-picture economists and retirement planners don’t need to know every detail of how the HECM program works, or lace their support of the products with the kind of formal, legal language that an originator or counselor must use — that’s the job of industry professionals on the ground level, not policy wonks and government officials who honestly want to expand the HECM’s footprint.

I knew this industry’s negative reputation when I accepted the opportunity to cover it; frankly, that was part of the appeal, writing about a space I knew little about aside from a possibly dark underbelly. Of course, the reality was far less seedy and more pragmatic, and I specifically credit the upstanding originators and lenders who urged me to think of the product as a loan and nothing more.

Like a car loan or a first-time homebuyer mortgage or a home equity line of credit, the HECM needs to be positioned as a tool not unlike a prescription — very good for some people in specific situations, very bad for others, and something that should be entered into only after consultation with experts and knowledgeable third parties.

But would the automotive lending industry tut-tut a proposal from a leading think tank to improve its products because the writer couldn’t name every situation in which a borrower’s car could be repossessed? Would a forward lender dismiss a plan to reach new customers because its author provided a succinct description of the foreclosure process that didn’t include every potential eventuality?

That’s what I hear every time an earnest proposal is shot down because its proponent had the misfortune of referring to HECM proceeds as “income,” or because the writer hasn’t followed every twist and turn of the program since the Reagan era.

Acting as though the HECM is this precious secret that only those with encyclopedic knowledge of the Single Family Housing Policy Handbook can fathom does nothing to bolster its reputation as a safe, pragmatic means to a necessary end for certain people. Instead, it further shrouds the product in mystery, closing off interest from the greater lending world and giving life to the rumors about predatory banks kicking the elderly to the curb for sport.

The next time someone reaches out a hand, think twice about biting — maybe reach back, make a few helpful clarifications while shaking it, and start working to build something instead of tearing it down.

Written by Alex Spanko

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  • Alex — thank you for this. You perfectly express something that has needed to be said for quite some time, and it’s refreshing. Well done.

  • Mr. Spanko,

    Well written op ed even though It is a somewhat skewed view of the problems facing originators and lenders.

    We have had a decade of well intended changes foisted on us by well meaning regulators and legislators. They got many of their ideas for change from listening to the conclusions of those who did not understand the workings of the program but moved forward anyway. After all weren’t they think tanks? Who cares about the warnings coming from the industry, those agreeing most strongly with the recommendations were from think tanks where the HECM was grossly misunderstood. The problem is the changes made or even suggested were not beneficial to the program, no matter which think tank was supporting them.

    Back in fiscal 2008, we had a well intended bill (HERA) pass Congress and signed into law by President G.W. Bush on 7/30/2008 based on the recommendations of Congressional leaders and housing experts. For one we were given the McCaskell provision which had no real input from our industry. Most agree it was poorly worded and, in fact, HUD refuses to adequately supervise the heart of its provision — adequate firewalls. Not long ago in the same ad from a HECM top 20 lender was an ad from one of their long-term industry veterans and management personnel stating he did HECMs and sold specific types of securities.

    Not even NRMLA knew that buried deep in HERA’s bowels was a provision requiring the HECM program to switch from the G&SRI Fund to the MMI Fund. Again well intended BUT with no real input from the industry. Someone with a great deal of power thought a great idea would improve the program and got it through with little vetting from others. I had no idea it was there until Mr. Peter Bell took me aside at a conference and asked my opinion about it a few months after passage.

    In that same bill was as Chairman Frank explained it, a trade off of a reduced origination fee structure above $200,000 in MCA and a total cap of $6,000. For that reduction we were told HECM endorsements would soar by the creation of HECMs for Purchase. There was no proof that the concept would work. In fact, many like me, were lured into believing we would see monstrous increases in endorsement production by one of our own after its passage. That is why to this day it is ridiculously called the “Sleeping Giant” because of its low endorsement production in light of expectations. As each change has come to H4P, we hear that the change will create a large positive response from the Senior house buying market. Some are very tired of that tale.

    Now let us turn to the matter of income. A HECM is debt as you so correctly state, It does not produce income unless there is a forgiveness of indebtedness. Anyone who talks in those terms is somehow trying to lure the hearer into a false concept about a HECM unless they do not understand reverse mortgages are, in fact, nonrecourse mortgages. I am glad the stinging lesson of not calling HECM proceeds income hit its mark.

    So let us come back. Mr. Peter Bell is more than just a superb advocate of reverse mortgages; yet look at the mess that HERA produced. Did HERA do good? For a while it allowed a rather meager increase (about 15% increase) in the lending limit but also made it national which helped some originators. It was not until the Obama Stimuilation Bill that the HECM lending limit rose by 50% in the contiguous 48 states.

    Then there was financial assessment. HUD sought NRMLA’s help with it but in reality, for the first time NRMLA failed at providing adequate guidance on this issue for good reason. For those who understand the impact of financial assessment, it is very clear that it was and remains the principal cause for the 10/2 changes as they are so commonly referred to.

    While I am glad this debate has begun, its elevated discussion is wonderful in a world where actual details do not matter. Unfortunately originators live in a world where even a missed property tax bill payment due to a life event can stop a HECM from closing even though the seniors have the right to pay it off in the next 58 months or so. In HECM land, details MATTER.

  • Excellent commentary Alex. I have been saying for years now that this is simply a “mortgage”. Yes, it does have different terms, but there is no need to think of it as rocket science or to treat the potential customers as little children who could not possibly understand this. Thanks for a breath of fresh air, now if we could only get HUD to listen to some common sense approaches to change, we would be in good shape. Sometimes we really just need to get out of our own way.

  • Well done expression of frustration, Alex. I know how you feel. If all I read each day were the comments by some in RMD, I’d think we’d have no future and want to jump out the window of a skyscraper (I’m in downrown Chicago ths week for a conference of the National Council of State Housing Agencies, so architecturally significant skyscrapers surround me.) Fortunately, I get my inputs from so many other sources, so I know the future is much brighter. But I do wonder why several “down-at-the-mouth” individuals feel the need to dominate the comments section, pick apart everyone else’s observations, are often misinformed themselves and have no qualms about being uncivil to others? How does that advance our cause?

    I can’t help but think that maybe if the reverse mortgage industry projected a more positive self-image, rather than appear to be feeling sorry for itself, we’d be in a better state of affairs. I realize tgat the negative commentary comes from just a few and the industry is blessed with participation by many hard-working, positive thinking, committed professionals.So if the complainers and sourpusses would just shush their pusses, we’d all be better off.

  • Alex – excellent points! As a newer HECM loan officer (though I have many years as a traditional loan officer), I have run into the same issues. People try to nit-pick every detail of the program before stopping to truly understand the benefits the program can provide for the “right” client. People like me appreciate your help; we truly do!! Keep doing what you’re doing!

  • Huge kudos Alex for putting this message into print. And huge kudos to RMD for allowing it to happen!!!

    Now my commentary:

    You and I have had some great conversations over the last 18 months and I can honestly say you have probably accumulated “several years” of experience in that 18 months. You are thoughtful in your questions and open to new ideas. RMD is absolutely the “go-to” source for information in our industry and you should be very proud of the role you play!

    As I have said many times, the reverse mortgage industry is in fact it’s own worst enemy!

    In a world where longer life spans are totally changing retirement for people in almost all income brackets, in a world where all statistics prove the great majority of this Country simply CANNOT make it through retirement without the use of home equity, in a world where 10,000 people a day are turning 62 just in this Country alone, the reverse mortgage should be thriving, literally thriving.

    Peter Bell stated it perfectly in his comment below when he stated “If all I read each day were the comments by some in RMD, I’d think we’d have no future and want to jump out the window of a skyscraper.”
    The truth is our future is bright, the truth is the traditional reverse mortgage may in fact be one of the best choices for millions of Americans to improve their quality of life and the truth is the Purchase Reverse Mortgage should also be thriving!
    The truth is also the constant diatribe of negativity comes from a very small group of “so called professionals” that haven’t actually made a living in the reverse mortgage industry for decades…
    There is a difference between an honest disagreement of facts and opinions and just pure negativity that serves no purpose other than to hurt our industry.
    I know it’s a fine line, (Damn that First Amendment.lol) but sooner or later RMD may need to consider defining that fine line a little clearer.
    I have no doubt when professionals outside our industry want to “research” the reverse mortgage arena they eventually end up right here on RMD.
    With that in mind, I think we need to take Peter Bells comments very seriously.

    • Mike,

      The real problem is not RMD, RMD comments or even RMD replies. It is what you point out, so many seniors are turning 62 daily and YET HECM endorsements are going nowhere. It is also like what Peter points out through the NRMLA stats showing ever greater senior home equity.

      We are at all time highs on senior population AND their home equity. So why so many years of HECM endorsement stagnation? Notice how little in the comments and replies people focused on our real problems and how they can be fixed. Someone the other day said that NRMLA is discouraging any discussion on the situation. Why? It is what it is.

      The other day I read where you and another writer were looking at the number of seniors purchasing homes in 2017. You came up with a number like 700,000 and he came up with almost twice that amount. Wow! What opportunity! Yet our focus is seldom on opportunities.

      I have already said enough. I hope all is going well at your shop. How are your Purchase Reverse Mortgage lectures going?

      • Hi Carmine,
        Thanks for the reply.
        To be clear, I am not blaming RMD for anything. They are the clear voice of our industry. But I am blaming just a few individuals for basically destroying this medium for our industry. I personally know more than a handful of reverse mortgage professionals that stopped posting comments over the last few years because they simply did not want to tolerate being told how wrong they were, how ignorant they were and be quoted multiple screens of useless statistics from the past. It’s just a damn shame…
        That being said, business is great. Like many I have reentered the forward mortgage business. My passion is still reverse mortgages and I use that passion, and my education classes, to get myself in front of groups of real estate agents and financial advisors. Except now, after the class is over, I ask for all their business not just reverse. It’s proving to be a great business model…
        I am personally having 8 closings in July, 2 reverse and 6 forward. (I wish that was the other way around!!! lol) .
        So life is good!
        Hope all is well with you and yours!

  • Mr Spanko, We RMLOs can be a twitchy bunch. After 15 years of having been roundly worked over by Senators, provided mis-information by financial experts on national news shows, heard from a borrower frrom their sister’s brother-in-law’s CPA friend to never ever get a reverse mortgage, and constant changes from HUD I can understand why you got the reaction that you did. We are too often on the defensive. Please forgive us for our critical replies.

  • Alex – I agree with your take, though I think it is a very small handful of people that do what you are suggesting. I think they just need to feel like the smartest people in the room, for whatever reason that may be.

    They are keeping people from being more active on your site, assuming you weren’t aware of that. This website is the face of the reverse mortgage industry to some extent, so here are some suggestions I would have to improve it (not that you asked).

    1) Require a real name and business email address to post. There is one user on here using two fake names to post as a test to see if he gets more traction than a clear fake name (the answer to that is yes). It’s a professional news website reporting on topics in our industry. If you aren’t willing to stand behind what you say, you shouldn’t be posting.

    2) Make posts available immediately (or much quicker). Clean them up after the fact. It’s hard to have a give and take with someone when their post doesn’t hit for 12-24 hours after submitting.

    3) Consider moving to a message board format? Important topics roll off the first page pretty quickly.

    Keep doing what you are doing, and hopefully more people will speak up to silence those that tear other people down.

    • Matt,

      Fair points and trust me I wish there was a better way to manage comments.

      Serious question — if we charged $100 a year to comment on RMD would you do it?

      Every person would have to be verified by a human with their picture… thoughts?

      • That’s tricky John. You’d have to have a vibrant community of folks sharing ideas for someone to pay you all to participate. Building that out from scratch wouldn’t be easy. Now if you asked us all to pay $100 to read the site, that would be widely accepted, I would think. That’s already being done by many news sites.

      • Hey John,
        I know it’s not easy and kudos for keeping the quality of RMD so high!!!
        And also, I would pay the $100.00!!!!
        it would be a bargain!!!!
        Hope all is well with you and yours!

  • Thank you Alex and commenters! We have been our own worst enemy for years. And now, it is time to move on. Thank you one and all.
    The Revere Mortgage is the only home financing tool designed for retirement. It should be considered first, not last. The details are how it will work for a particular customer in a particular situation.

  • Alex –

    Don’t let it bug you. It’s easy for superfans to act like pedantic attendees at a Si-Fi conference savaging the panel over technical inaccuracies of episode b27-6A of Battlestar Galactica…

    Seriously though, you’d never get an article completed (or anyone to read it) if you had to cite all the provisions, exceptions and historical context to please a few people intent on finding fault. I’m happy with an overview that can be read in a few minutes with a link to the relevant source documents.

    Your comparison to a prescription – good for some and others – is a remark I’ve made a few times. I more often tell clients the HECM is a dance with the devil and when the music stops you might not be going home alone. From working on the back end of these loans I tend to be quite savage about the negatives before putting a client into a HECM.

    Comparison to a car loan or HELOC with respect to disclosure is a bit different here. The downside risk is vastly greater than getting your ride snatched or dealing with a default while you still have physical and mental capacity. It’s only in the last few years RM advertising has specifically mentioned property charges and foreclosure, if in a somewhat terse manner. FA, LESA and lower PLFs will help, and there’s probably half a dozen things loan reps could do right now that would reduce future carnage and improve the product image.

    Ok, enough with the screed. I applaud you for jumping in writing so clearly about such an esoteric subject and look forward to you and your co-worker’s future articles.

  • Hey Alex,

    You were not around in the days when RMD got the vast majority of its readership. Go back to articles over the first three years and read the comments and replies, even Liz was not around in those days. But then those comments and replies might shock you.

    One guy used to call Peter Bell by names I choose not to repeat because Peter is undeserving of such vulgar names. Another used a name ending in maniac and his comments and replies read like them as well. Things have calmed down since that time. Yet those were the days when readership was growing. And the comments I am advising you to read were during the exact years when endorsements were at their peak.

    Repression makes governments homogeneous and worse. Most censors do not believe they are repressing but that is exactly what they are doing and yet some is needed; however, a little repression goes a long way. So be careful what you suggest. That is the reason we have a First Amendment in the Bill of Rights.

    Today you propose making RMD bland. That is fine if you believe that RMD comments and replies are the main problem why so many seniors do not get HECMs. Yet I doubt if the comments in RMD have changed even 1% of HECM prospects’ minds; who knows it may cause them to get HECMs. When is the last time that a senior has shown a RMD COMMENT or REPLY to an originator that saying that is the reason they will not get a HECM; yet that has happened thousands of times with negative articles from newspapers. If seniors come to RMD, it is not to read comments or replies.

    The reasons why HECM endorsement volume are so low have absolutely nothing to do with RMD COMMENTS or REPLIES but they do stir up a lot of interest in what will be said next on RMD. I believe what you attack in your op ed is what makes RMD strong and has NO direct or indirect correlation to the endorsement situation in the industry.

  • Alex, great points in your article! The comments we too often see hurt the industry more than help it. I know our referral partners, legislators and even prospects and clients read the articles and comments and it has impacted their thoughts about reverse mortgages.

    And it’s certainly frustrating (and inappropriate) when the commenters pick on the writer(s). I am glad you spoke out. It has been needed for awhile.

    Hopefully we as an industry will stop biting our helping hands.

    Keep up the great work!

  • Alex,

    I concur with all my colleagues, great article, well said and you let it all out the way you truly felt! I applaud you with your honest approach and telling us all the way it really is. More comments along your line of thinking need to be made.

    You mention in your article about the industry lashing out at a good-faith plan to develop new revenue streams and opportunities, you also say it makes no sense to you!

    I don’t feel you meant it the way it sounded. We must, especially in view of the changes overall in our industry seek out new opportunities and new markets.

    I continually talk about going after the professional sector, the financial planners, advisors, banks, credit unions, recreational dealerships ETC! I also feel we need to focus on those senors with low loan balances or none at all, there are ways of doing just that!

    However, I do agree with your big-picture philosophy. Economists, retirement planners, financial advisors and others in the world of economics, they do NOT need to know every detail of how the HECM program works!

    We make that mistake to many times and barrel in and right away try and teach and push our product down their throats! Instead we need to be listening to them and understanding what they do and how they fit in to the planning of their senior clients retirement future!

    You did a great job with your article Alex, I enjoyed it very much and obviously many others did as well! I also learned a lot from you and I am sure the rest did also!

    Alex, you and your family make it a great weekend for yourselves, I know you deserve it my friend!

    John A. Smaldone

  • Tough to write your plea for sanity, Alex. We are all emotionally involved in this industry and know first hand the value of our work. Everyone else seems like an enemy as we slug it out in the trenches. To me, the entire mechanism of a HECM is complicated, and it’s tough to express frustration with people who claim to support us and then demean us with their uppity attitude. Obviously, we all need to be able to move forward in this declining market, Some of our ideas are untried and useless. It’s tough for people like Peter to be pleasant when we attack each other to find the next golden spoon when he has already dealt with that idea a dozen times knowing it won’t work. I think we are all a little desperate for success now so we aren’t always on our good behavior. Sorry for anything I might have said here to offend. We need some breakthroughs now so we need to be inclusive with each other as we interact here. Our comradery will help keep us in line as we forge away into the future. There’s a lot of folks who need us. Thanks for hanging in there Alex (and for being honest). Bring on your ideas. We need you happy.

  • One aspect of this that has had me wondering for some time. I’ve had a HECM closing, and two years later a refinance closing, and haven’t had a closing cost in either, above the $500 that went-to the closing-lawyer and some misc.

    How does the oft-quoted “$6,000 in closing costs” play so significantly in all this? Plus, I’ve seen quite a few posts right here on RMD suggesting that low or no closing costs presented by originators has become routine in the typical, “present day” HECM closing.

    Another point, with regard to making a HECM loan easier (cheaper) to obtain for prospective borrowers with higher credit scores and/or borrowers looking for lower, total amounts in HECM loans. These ideas, of course, make sense in an objective way of looking at it, but it erodes the the very “original intent” (and attraction) of the HECM program itself.

    The HECM isn’t intended to reward the senior citizens who are the best-in-class for personal-finance management. Actually, just the opposite.

    The HECM has traditionally displayed an example of the government offering a hand-up to regular, working seniors who are short on cash flow in retirement. Skepticism generated by the idea of the government “saying”: “We’re the government, and we’re here to help” has been mitigated by the fact that the terms of the HECM are relatively so easy to meet for senior citizens; only a few years ago, credit and income weren’t an issue at all for HECM-qualification.

    Changes were made with (the “Financial Assessment”) where credit and income “mattered,” but only somewhat: the HECM cash flow could be incorporated into the formula to determine the borrowers’ financial sustainability under the HECM program. It still wasn’t altogether difficult to qualify for the HECM, and at the same time, the purpose of the Financial Assessment of lowering the probability of loan-default, was satisfied.

    But, imo, there’s a tipping-point. To preserve the integrity, the basic attraction of the “intent” of the HECM program, that point has been reached.

    • The $6,000 comes into play on a 2% UFMIP based on a $300k max claim amount. Plus, you still have other fees to consider, which will normally result in closing costs of approximately $10,000 when you factor in all the other fees. In some cases, it can be even higher depending on the state and transfer taxes (such as Florida, TN, GA, VA, MD, etc). The transfer taxes are based on 1.5 times the max claim amount so these fees can be quite substantial in a lot of cases. The point I was making is that someone who only wants to take out a small amount on the HECM should not be charged the full fees as someone who wants to max out the loan.

      Risk based pricing exists for all other mortgages. Why should the HECM be exempt from any risk based pricing? You think risk based pricing is a bad idea? Again, the level of risk should be accounted for.

      I don’t get your idea of how a senior wanting to take less erodes the intent of the HECM. How is that? If a borrower wants a specific amount, they shouldn’t be forced into taking more. Even if the excess funds are in a line of credit, they may have no intention of ever using it, but will still be charged based on if they do. That’s just a backwards way of thinking.

      The HECM isn’t a product to reward anyone. It’s a mortgage and just like every other mortgage in America, there are adjustments based on risk. Why is the HECM exempt from this risk based model? Whatever has been tried in the past has not worked. Why should someone with A+ credit get the same deal as someone that requires a LESA? This makes absolutely no sense. You want more seniors to take out a HECM? Well, you may need to make the HECM a better deal for those type of borrowers.

      Yes, the FA has helped reduce defaults. However, HUD needs to take it a step further to put these loans on better footing. It’s not just default claims that need to be looked at, but assignment claims as well. Reducing the PLV and removing the line of credit growth would reduce claims substantially.

      • Well, like I say, these further changes make sense in an objective way of looking at it, standalone, but the HECM, specifically, has had enough changes, regardless. The HECM could be changed to the point where it looks like a HELOC, and reduce the number of defaults, too.

        Your last paragraph tells me that we’re at the polar opposite ends of this issue:

        Begin Quote:
        “Yes, the FA has helped reduce defaults. However, HUD needs to take it a step further to put these loans on better footing. It’s not just default claims that need to be looked at, but assignment claims as well. Reducing the PLV and removing the line of credit growth would reduce claims substantially.” End Quote.

        It’s the overall concept: In other words, the continuous “adjustments” (changes) are all oriented toward the program’s bottom line, and with no borrower-consideration involved at all.

        The problem may not be the “borrow less/cost less” idea per se, it’s the “what’s next;” the trend is toward making the HECM more and more attractive for only those at the administrative end of the process. Also, it’s not going to excite new, prospective borrowers who see that the borrowers who need the loan the least, get the best deal.

        Those borrowers have the HELOC. The HEMC is intended for those with retirement-long needs of cash flow; that’s who should get the best deal.

        In my opinion, the priority for a “way out” is to preserve the aspects of the HECM that are attractive to borrowers. That’s a prerequisite.

        Well, we see that you do have a “what’s next”:
        “Reducing the PLV and removing the line of credit growth would reduce claims substantially.”

        Ya, if there are any more new loans originated to make claims upon in the first place.

      • The program’s bottom line means more at the moment than what provides the borrower with the max cash and other perky benefits. It’s about the survival of the HECM and turning losses into a surplus so further changes down the road can happen that will prove more beneficial to the senior. The reason HUD imposes these changes is because everything that has been done previously has not worked or stopped the bleeding. Everyone is so caught up in the past with what the program used to be or what has been taken away. As an industry insider, everyone has a stake at what changes happen. Either you can let HUD make changes on their own without your voice being heard, or you can try and make suggestions that hopefully someone will hear and consider since most of the ideas here are the same old.

        Anyone that has a run a business knows you can’t continue to operate under the same plan that has failed over and over again. You want to keep everything intact without any real significant changes but expect HUD’s losses to stop on their own. It just doesn’t make sense.

        Eliminating the LOC growth will not deter new business. That is a bonus, not a pre-requisite as you put it. If your business model is based on selling the LOC growth, then sure, that probably isn’t an idea you would support. Overall, it is a great idea since there is no other mortgage on the planet that allows you to borrower more over time without having to apply for a new loan. The PLV idea is for those who want the HECM, but don’t want the full amount. Why shouldn’t they be allowed to get the HECM if they only want a small credit line? Why should that senior be forced to get a HELOC and make payments? That premise doesn’t make sense either.

      • Reducing the LOC growth would only further stunt and diminish endorsement numbers, and by a lot! Are you saying that is something that should be done?

      • I’m not saying to reduce the LOC growth. I’m saying it should be eliminated completely.

      • Interesting, so in your experience what would you propose this loan look like? Give us a quantified proposal on the rates, terms, and fees. Then give us the market for which this new loan would serve. How long have you been originating Reverse Mortgages? What you propose is not a product that is currently offered and I am sure others like myself would like to know the benefit of such a loan, both to the borrower and to the invester.

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