2021 has now come and gone, and with it another atypical year for the reverse mortgage industry, the United States and the larger world. While 2020 was understandably dominated by the onset of the COVID-19 coronavirus pandemic and the business’ adjustment to it, there were also notable national events that would come to shape the reverse mortgage industry, not the least of which is the transition to a new presidential administration and the establishment of new policy priorities that comes with that. The reverse mortgage program was not spared from shifting political realities.
By contrast then, 2021 was a year of adjustment to a new normal. The pandemic continues to persist, but the development of various treatments not available in the prior year has given the country – and indeed, the reverse mortgage industry – new tools to adjust as things begin to look different. Reverse mortgage lenders introduced a series of new products and initiatives designed to expand the base of borrowers who can be served, while at the same time the industry relied more heavily on existing customers than at any previous time in at least the last 12 years.
Those big events don’t always translate into the “most-read stories” when it comes to RMD, however. Sometimes they do, but you might be surprised to see the stories that grabbed the most attention of readers. To that end, here are the top 10 most-read stories published on RMD in 2021.
- White House announces extended foreclosure moratorium, HUD delays servicing revisions (Jun 24)
Indicative of some of the political change seen over the course of the year, the Joe Biden administration in June announced yet another delay of a moratorium on foreclosures stemming from the pandemic first instituted the previous year under the Donald Trump administration. Earlier in the year, the White House had also announced a series of revisions to single-family mortgage servicing policies – including a new defect taxonomy – would be pushed into March, 2022. It remains to be seen if the new guidelines will go into effect as scheduled, however, as a new and more virulent COVID-19 variant is hitting the American health system hard.
- Reverse mortgage lending limit rises to $970k in 2022 on heels of FHFA limits (Nov 30)
The release of a new Home Equity Conversion Mortgage (HECM) program lending limit always garners significant interest among RMD’s audience, but the way in which the new limit was rolled out was certainly unconventional. In an unexpected move in late November, the Federal Housing Administration (FHA) raised the lending limit for the HECM program on the same day that the Federal Housing Finance Agency (FHFA) announced it would be increasing the conforming loan limits on mortgages to be acquired by the Federal National Mortgage Association (FNMA, or “Fannie Mae”) and the Federal Home Loan Mortgage Corporation (FHLMC, or “Freddie Mac”).
On top of this unusual cadence for the announcements, the lending limit itself now stands at $970,800 for 2022, increasing at a rapid pace in conjunction with high levels of home price appreciation (HPA). With a reverse mortgage lending limit of very nearly $1 million, some in the industry speculated for RMD that the proprietary reverse mortgage market might be negatively impacted, but such an occurrence remains to be seen.
- Look out for these 4 reverse mortgage industry trends in 2021 (Jan 3)
In a look at potential moves that lenders could make in 2021 as well as appraising the political landscape for the year, the focus was all on technology: making things easier for borrowers in terms of interfacing with their loans and with their servicers. RMD also speculated at the time that higher lending limits could interact in some way with the proprietary market, but that prediection could be better suited for 2022 considering another notable increase in the HECM maximum claim amount (MCA).
There certainly were a lot of differences to be seen in 2021 when it comes to the posture of the federal government. HUD made clear that it wanted to focus on remedying potential inequities in homeownership, while the Consumer Financial Protection Bureau (CFPB) saw a very active interim director give way to a new full-time leader who has a longstanding regulatory reputation. As predicted, however, transformative changes to HECM policy were not to be found in 2021.
- FHA extends eviction moratorium, but foreclosures on schedule to resume (Jul 30)
Relief aimed specifically at homeowners became a natural concern over the course of the pandemic’s first year, so when FHA announced it was extending a moratorium on evictions specifically related to foreclosures to the end of September 2021 it garnered a lot of interest. Perhaps more surprising for some was when FHA specifically said that the previously-extended foreclosure-specific moratorium would expire on schedule at the end of July, and that it would not be re-extended.
Part of the reasoning for this according to the agency was to target relief more specifically at those households which are severely distressed, namely those whose foreclosure would’ve resulted in an eviction. That moratorium expired at the end of September, but certain states decided to extend their own similar restrictions.
- FHA officially drops LIBOR for adjustable-rate reverse mortgages, adopts SOFR (Mar 11)
In news which was a long time coming, FHA announced in March that the HECM program would be moving on from the beleaguered London Interbank Offered Rate (LIBOR) index for adjustable-rate HECMs, and will instead adopt the Secured Overnight Financing Rate (SOFR) as was the industry’s previously-stated hope. This was made official with the publication of Mortgagee Letter (ML) 2021-08.
“Through its appropriate use of the authority granted via the Reverse Mortgage Stabilization Act, HUD has promulgated policy that will strengthen HECM’s place in a more broadly accepted and mainstream mortgage market,” said National Reverse Mortgage Lenders Association (NRMLA) President Steve Irwin at the time. “This policy will also continue to bolster the safety and soundness of the HECM program, which is always a key consideration in the development of HECM policies.”
- White House unveils 2022 budget priorities, including for housing and seniors (Apr 11)
It’s always a curious development for the industry to see how new political leadership will position the HECM program, and while this Biden administration budget proposal did not make that as clear as it could have it still provided a necessary look at the actions that the government could aim to take to address issues facing America’s older population. In addition to making a larger raw dollar funding request for HUD when compared to the previous administration, the White House declared some of its housing priorities.
These included an expansion of affordable housing availability and a new, higher level of investment in the HOME Investment Partnerships Program, designed to build affordable housing in vulnerable communities.The ultimately-released 2022 budget proposal revealed that FHA’s HECM program was projected to operate at a credit subsidy level generating more receipts for the federal government than it would pay out in claims for the year’s HECM book of business, marking for a substantive improvement in the overall position of the HECM portfolio and confidence in its solvency from HUD and the White House. This ended up being reflected in the 2021 Mutual Mortgage Insurance (MMI) Fund Report.
- HUD secretary, AARP CEO address aging in place and seniors’ housing concerns (Aug 25)
HUD Secretary Marcia Fudge sat down for a conversation with AARP CEO Jo Ann Jenkins about the state of senior housing and aging in place, marking the first major senior-related public comments made by the Secretary since being sworn in earlier that year. Among the topics discussed, Fudge and Jenkins touched on the preferences of many seniors to age in place; why communal living settings have become less prominent in the senior living landscape in recent years; as well as legal realities at local, state and federal levels that sometimes act as impediments to the expansion of senior housing.
- Origins: the ‘Slumdog Millionaire’ of reverse mortgage entrances (Apr 20)
In a returning “Origins” feature tracking the entrances of reverse mortgage professionals into the space, RMD sat down with Omar Ennabe, co-founder of Orange, Calif.-based Ennkar, who cited a popular film to help describe the way in which he entered the reverse mortgage business.
Director Danny Boyle’s 2008 hit film Slumdog Millionaire tells the story of how an 18-year old from Mumbai found himself on a popular game show that would go on to change his life forever. The way the film is structured gives a very holistic perspective on the events that lead the main character into a unique new situation, and Ennabe feels a degree of synergy with that character’s story in terms of the way he entered the reverse mortgage business.
- Liberty parent Ocwen/PHH buys RMS servicing platform (Jun 18)
Ocwen Financial Services, parent company of top 10 reverse mortgage lender Liberty Reverse Mortgage, announced that its wholly-owned subsidiary PHH Mortgage Corporation has acquired the operations, employees and assets of Reverse Mortgage Solutions (RMS) from its previous owner, Mortgage Assets Management, LLC (MAM). PHH will also acquire all of the outstanding equity interests in the RMS real estate-owned business, REO Management Solutions, LLC (“REO”).
The deal closed a few months later, making Liberty an end-to-end reverse mortgage services provider.
- AAG moves into new headquarters, adopts hybrid workforce model (Jun 8)
American Advisors Group (AAG) announced that it completed moving its corporate headquarters to a new location in Irvine, Calif., expanding its footprint in the city’s Irvine Towers complex while consolidating its overall geographic footprint in its local community in order to reflect a new hybrid workforce model.
Overall, while the company has expanded its presence in the office complex, the transition to a hybrid working model has had a demonstrable impact on the work/life balance of the company’s employees, and is expected to translate into a favorable evolution for the company’s workforce according to executives who spoke with RMD.