Federal Housing Administration (FHA) Commissioner Julia Gordon reaffirmed the commitment of the U.S. Department of Housing and Urban Development (HUD) and the administration of President Joe Biden to the stewardship of the Home Equity Conversion Mortgage (HECM) program to a group of assembled reverse mortgage industry professionals at a national conference this month.
At the National Reverse Mortgage Lenders Association (NRMLA) Annual Meeting and Expo held in Atlanta at the beginning of November, Gordon shared prepared remarks regarding the necessity of the public and private sectors to keep issues related to senior housing and aging in place front of mind. She also encouraged ongoing dialogue with the association and other industry entities to help refine the program where necessary.
Addressing the needs of an aging population
The commissioner began her remarks by looking at the venue’s city, explaining how it can serve as something of a microcosm for the rest of the nation in regard to the growing senior population.
“This is a city where the population is aging quickly, with those over 65 representing almost 12% of the Atlanta metro population,” Gordon said. “And of course, this is a trend we’re seeing in many major metropolitan areas, and in fact, all over. It isn’t news. We’ve talked about it for many years. But I thought I would mention it given the crowd that we have here today.”
This helps to emphasize the need for programs like HECM, she said, as well as for further collaboration between the public and private sectors.
“As the population gets older, the federal government and the private sector need to place the same emphasis on housing supply and affordability for seniors that we do for newly-formed households,” she said. “And that’s why I believe that the work that [reverse mortgage professionals] do is so incredibly important. I believe that helping seniors who want to stay in their homes is what FHA’s HECM product is all about.”
Gordon also reiterated the commitment of the Biden administration to the fundamentals of the HECM program.
“Under this administration, we remain fully committed to the [HECM] program, and the benefits that it can bring — when deployed correctly — to improve the quality of life and housing stability for senior homeowners.”
The need for industry feedback and discussion
Gordon dispensed with some of her other prepared remarks to instead emphasize the necessity for ongoing dialogue between HUD, FHA and members of the reverse mortgage industry to more adequately refine the program in the months and years ahead.
“Your feedback on our work is the most important thing that we get,” Gordon explained. “And I say that regardless of where you are in the industry, or what you do, because […] for the size of the programs and portfolio that we manage, we are a relatively small and always under-resourced office. And there is a certain reality to the fact that when we hear specific recommendations for policy improvements, that is more likely to get our attention and to get our action than just sort of vague comments […].”
She cited comments submitted to HUD regarding the new draft HECM section of the Single Family Housing 4000.1 handbook, as well as a proposed defect taxonomy that has application to reverse mortgages. Specific feedback about such policies garners more attention than general comments, she said.
“That is the kind of input that we pay tremendous attention to, [and that] we work through,” Gordon said. “We when we get feedback, even after we put out a policy, we try to go back and see if there is a way we can improve this [or] do it better.”
That being said, while it’s not always possible to act on all of the feedback that is received and since HUD and FHA staff may have a different lens through which they perceive policy priorities, but that does not diminish the necessity for an active and open dialogue between industry participants, stakeholders and government officials, she said.
“In my view, and really throughout my career, I’ve found that the most important thing is building this relationship so that we can have an honest dialogue,” she said. “That’s what we owe each other as participants in this important program, and that’s what we owe to the senior homeowners that we serve.”
A need for reverse mortgages
To close out her remarks, Gordon acknowledged the difficulty that the mortgage business is facing and the challenge taking place in the capital markets. However, these challenges help to reinforce the need for a product and program such as HECM, she said.
“We are very well aware of the pressures and the concerns that are out there,” she said. “We also see many reasons [to] believe this is a strong product and a strong industry, and there is a need in the marketplace for this. I think that we can all work together. That means collaboration between lenders, consumer advocates, government agencies and investors to really come together and weather the challenging part of the economic cycle that we’re entering.”
Gordon shared that she had recently spoken with Ginnie Mae President Alanna McCargo and emphasized that both FHA’s and Ginnie Mae’s proverbial doors are open to reverse mortgage professionals.
“If you see some trouble ahead, reaching out early is great,” she said. “We’re all there to help get through this time together. And so, I want to thank you again for the work that you’re doing, both for the FHA HECM program and for the community.”