After adjourning in August, the reverse mortgage industry is watching closely as the Senate is scheduled to reconvene in Washington this week.
The Senate Appropriations Committee included $150 million for the HECM program in its FY 2011 budget, but Washington insiders say the odds are slim that there will be any movement on the bill before lawmakers head out to the campaign trail for the November midterm elections.
If the Senate fails to pass a budget, Congress will likely be forced to pass at least one “continuing resolution” to prevent a federal shutdown and continue operating at the 2010 budget level. Where the HECM appropriation goes from there isn’t clear, but with the Senate providing $150 million and the House passing a budget with $140 million of support for the HECM program, the appropriation process had a positive impact on the industry.
“We were able to spread the word about what we were doing in a tight budget environment,” said Jeff Lewis, Chairman of Generation Mortgage and the leader behind Coalition for Independent Seniors. “A lot more people are understanding our demographic and what we can do for these people who don’t have enough retirement savings.”
Still, the industry needs to continue working with the Office of Management and Budget to re-examine their assumptions for the HECM program.
“Taking the subsidy isn’t a long term solution to the program since the fundamental goal of FHA is to break even,” said Lewis. Despite some who believe that the HECM program doesn’t need to break even because the borrowers are special, “that does not work,” he said.