As reverse mortgage professionals working to serve seniors in today’s market, we are forced to constantly check our rearview mirror as we cautiously proceed, always keeping an eye out for dramatic changes in regulation while searching the horizon for traffic congestion. This need for dexterous maneuvering is not likely to end, nor will it for quite some time.Consider the CFPB. It is coming along in its required study of our industry and must report results and recommendations to Congress before July 21. This signals more regulation and lender accountability. The question is, what can we do to prepare? Has the storm passed?
One could say that until three years ago, our industry was on auto-pilot. We offered the same product for nearly 20 years with very few earthshaking regulatory changes.
Then it hit: required use of appraisal management companies, reduced principal limits, plunging home values and increased regulatory scrutiny. Was this an unfair attack or the natural maturing of our industry as we became more mainstream? The situation brings to mind a humorous quote: “I wouldn’t be paranoid if everyone didn’t pick on me.” Indeed, it does feel like those of us navigating the reverse mortgage space are being picked on, but the fact is, our industry is coming of age with the associated growing pains that follow.
Reverse mortgages are now a common topic in the media, and more importantly, the industry is making the agendas of federal and state lawmakers. While home values seem to be settling and we have acclimated to new rules, licensing and products, we must be vigilant and always look ahead – not with fear, but with preparation. We must focus on the future rather than fixating on what has already passed. Accept the changes and adapt. Second, we must fill our gas tank for the journey ahead and pack our bags properly for what may be over the horizon. We can fill our tank by continuing to work on our business and not letting the past or present regulations discourage us. We can prepare for what lies ahead by examining our own business practices and identifying weak points and things that can be shored up.
Is your market overly focused on a vulnerable demographic that may no longer qualify? Is the focus on lower-valued homes leaving you exposed to possible interest rate increases or principal limit reductions? Are you broadening your reach to middle- and upper middle- class retirees? It really comes down to acceptance and preparedness. In the end, while the changes may be unpleasant, the result will be a more robust, mature and accepted product in both the minds of the public and lawmakers. So, keep the foot on the gas pedal and drive on, and don’t stare too long in the rearview mirror.