The Massachusetts State Legislature this week extended a series of relief provisions stemming from the initial onset of the COVID-19 coronavirus pandemic, including allowances and authorizations for everything from mail-in voting to remote public meetings, to takeout cocktails and telephonic and video-based reverse mortgage counseling. This is according to original reporting from local media in Boston, as well as reverse mortgage lenders and counselors operating within the state.
The legislature fast-tracked the initial bill, S.2467, before passing an amended final version under the designation of S.2472 on June 15, the original deadline for the outlined pandemic relief. That deadline has now been extended by six months to December 15, according to the legislation and people with knowledge of its formulation.
However, since Massachusetts remains the only state in the nation that still has a face-to-face reverse mortgage counseling requirement on the books, another more permanent issue arises that has the potential to be addressed by the end of the year, according to Massachusetts-based reverse mortgage professionals who have spoken with RMD.
The current relief
The new relief extending the ability for reverse mortgage counseling to take place via telephone or other electronic conferencing means comes as a welcome occurrence for the reverse mortgage industry within the state, as the face-to-face requirement – originally enacted in the interest of senior consumer safety – can add to the burden of a potential client who may have difficulty traveling, or who may have an aversion to a face-to-face meeting according to area professionals.
Last week, both the National Reverse Mortgage Lenders Association (NRMLA) and the Massachusetts Mortgage Bankers Association (MMBA) submitted comment letters to the state legislature explaining the importance of extending telephonic counseling relief, as a lapse in the concession had the potential to negatively impact the ability to conduct reverse mortgage business in the state.
With the state of emergency as declared by Mass. Gov. Charlie Baker expiring as of June 15, the impact to business could’ve been pronounced due to the lack of available counselors who are approved by both the Massachusetts Executive Office of Elder Affairs and the U.S. Department of Housing and Urban Development (HUD). That shortage of available counselors was the most immediate concern for the reverse mortgage business as it relates to the state’s expiring relief.
“The driving issues have been the limited number and location of counseling agencies and certified reverse mortgage counselors,” says George Downey, founder of Harbor Mortgage Solutions in Braintree, Mass. “More recently, documented in the NRMLA and MMBA letters sent earlier, the number one factor now is virtually no individual in-person counselor capacity (last tally was 5 full time and one part-time individual counselors are available to serve the entire state).”
Still, at least one counselor who operates out of the state was optimistic that necessary relief would come through from the legislature. This is according to Jennifer Cosentini, housing director at Cambridge Credit Counseling Corp. in Agawam, Mass.
“I was very optimistic that we were going to hear that they were going to extend it because obviously, due to COVID, it’s just too soon to tell seniors that they have got to go see someone face-to-face,” she said in a call with RMD. “And not to mention the shortage of counseling agencies now in Massachusetts, we can’t really meet any demand. We’re not even in the office yet.”
What the future may hold
One thing that some decision-makers in the state of Massachusetts may not fully comprehend is that while a face-to-face counseling requirement is made in the interest of consumer protection, that potential protection can come at another cost of time and effort for a senior to have to travel to a counselor. Combining that with the strained resources of Massachusetts reverse mortgage counselors already has the potential to make business very difficult to accomplish for lenders, clients and counselors.
That shortage of counselors makes the relief inherent in telephone and video calling an “essential” measure beyond just the bounds of the pandemic, Downey said. In terms of whether or not phone or video counseling will be a permanent solution for the state, Cosentini is optimistic that lawmakers and other stakeholders will come to the proper conclusion when they see the data compiled by her company, and which she submitted to NRMLA.
“I do think there’s a strong possibility that it’s going to be permanent after December,” she says. “Our Massachusetts clients were absolutely thrilled that they did not have to come into the office. When we compiled this data looking at how far these seniors would have to travel to come see us, it was hundreds of miles in a lot of cases. So, they were so happy that they didn’t have to do it. A lot of them were clients that we had counseled in the past, and now they were doing a refinance and thought they would have to come see us face-to-face. They were so happy they didn’t have to do that this time.”
Adding to the possibility is the fact that certain legislation for more permanent counseling relief awaits further deliberation by the legislature, Downey explains.
“H1146 has been filed, assigned to the Joint Senate and House Financial Service Committee, and is pending action,” Downey explains. “If passed, it would make video and telephone counseling a permanent option in addition to in-person counseling.”
Prior stalling of business
At the initial onset of the pandemic, reverse mortgage business in the state of Massachusetts was effectively halted due to the in-person counseling requirement conflicting with the governor’s state of emergency, requiring social distancing and for people to remain home. Adding to the applicability for the reverse mortgage industry was the devastating health impact that the disease resulting from COVID-19 has on seniors, particularly those with compromised immune systems.
Shortly after RMD and other outlets reported on that pause in business within the state, the governor and state legislature moved quickly via emergency legislation to restore the ability for reverse mortgage professionals to continue operating with relaxed counseling requirements, in addition to concessions allowing other forms of previously-restricted commerce to continue.