Written by John LaRose, as originally published in The Reverse Review.

Generations are marked and defined by their movies. Dramas have impact, but it’s horror movies, the stuff of nightmares, that we remember most. My parents shuddered to Count Dracula and White Zombie­—movies that probably wouldn’t raise an eyebrow today. For boomers like me, the definitive horror film was Alfred Hitchcock’s Psycho. I’m not embarrassed to say I was one of countless people unable to shower comfortably for months after seeing it.

My worst nightmares today don’t come from movies. They come whenever some of my worst fears (fraud, defaults) about the vulnerability of some of our borrowers are realized. One nightmarish fear was realized when the following appeared in The Detroit News on January 25, 2012:

Texana Hollis, who was evicted from her Detroit home at age 101, is getting offers of help from as far as Hollywood, Washington and Asia. She seemed full of life Tuesday after hearing that people including actor/filmmaker Tyler Perry, U.S. Rep. Hansen Clarke, D-Detroit, and a woman from Afghanistan had reached out to her. “Whatever they were saying, it was good,” Hollis said, acknowledging her difficulty hearing. “And Lord knows I appreciate every one of them. During my lifetime, I helped a lot, a lot of people. Never in this life would I ever think that it would come back to me.” Hollis was evicted from her house of nearly 60 years on the 8300 block of Carbondale Street on Sept. 12 after her son failed to pay property taxes to maintain a reverse mortgage taken out in 2002. Brian Sullivan, a spokesman for the U.S.

Department of Housing and Urban Development, said two days later she could return to the house “for as long as she wants.”

My son Ryan and I have worked aggressively and diligently to protect our borrowers and industry from scandals of this nature. We cannot, however, protect our borrowers from the loneliness that compels them to take calls from “lottery officials” or, in this borrower’s case, from the failure of a family member to pay taxes and insurance in a timely manner. Defaults are the stuff of my greatest nightmares. I picture Texana Hollis, sitting on the curb outside her padlocked home, and the image elicits more dread than the one of Janet Leigh succumbing to the blade in Psycho.

In October, NRMLA membership prudently and responsibly recommended that financial assessment tools be implemented. Assessments of this kind would protect the integrity of our product and industry, and more importantly, they would help protect future borrowers from defaults. Urban Financial and other industry leaders are reportedly seeking input from the industry on the development of borrower assessment tools. From a servicer’s perspective, these actions are viewed as a serious effort to proactively stem defaults, and are therefore a dream come true.

The exit of our very own “Big Three” from the reverse mortgage industry can be partly attributed to what some may say is an “unbalanced” regulatory environment. Socrates said, “We must know how to choose the mean and avoid the extremes on either side, as far as possible.” That wisdom applies to government oversight and regulation, as well as the process of vetting borrowers for the reverse mortgage product. We are not the solution for all cash-strapped senior borrowers, nor are all senior borrowers great for our reputation. We can, and should, meet in the middle. Borrower financial assessment tools move us there by protecting everyone.

Generations have been marked and defined by their movies; leaders are marked and defined by their actions. Who is going to take the lead? If our industry is not going to support these initiatives, or take the lead in enacting acceptable financial assessment tools, we could be writing the script for our very own horror story.