On the Docket
The misinformation spreads virally. A consumer advocate hears a complaint from a disgruntled reverse mortgage borrower. The consumer advocate is interviewed by a CFPB staffer for a reverse mortgage report and repeats the complaint, which has now become an anecdote. The CFPB, trying to deliver a report without compiling any data, draws conclusions from the anecdote. A New York Times reporter picks up the conclusion based on the anecdote and reports it as fact. (After all, it came from the CFPB!) Reporters in Jacksonville and Houston repeat the conclusion. (After all, it was in The
We live in a time of shrinking news staffs. Original source research, once a staple of papers, has been replaced by Googling another newspaper’s story on your iPhone. Data compilation is something you let other places spring for.
How do we stop the flow of misinformation? How do we prevent anecdotal evidence from mushrooming into conclusions that influence policy? How do we break the chain of foolishness?
Well, we can take the Stephanopoulos/Carville War Room approach and correct every bad story, as we have done with the support of Rasky Baerlein Strategic Relations. (In the past two weeks alone, we responded to stories in the Chicago Tribune, Florida Times Union and the Houston Chronicle.) We can try to divert attention from the criticism with alternative stories, the preferred tool of this year’s political campaigns. We can ignore the bad press and talk directly to consumers, which means substantial advertising expenditures. Or we can tackle the issues that continue to show up in the press (fixed rate, full draws; aggressive advertising; etc.) and try to eliminate them so they can no longer be criticized. There are arguments to be made for each approach—and maybe for all three approaches.
To help us choose which road (or roads) to take, NRMLA has formed a Public Relations Committee comprising some
of the best marketing minds in the industry. Chaired by Jean Noble of Urban Financial, it includes Teague McGrath of AAG, Mary Smith of Genworth, Mary Katherine Quasarano of Celink, Rick Peters of Security One and Dave Hickey of Nationstar. As of this writing, the committee has convened just a few times and is beginning to dig its way through the various options. We’ll continue to discuss its progress in future issues.
On Board: Follow-Up to the FHA Insurance Fund Audit
HUD’s response to the 2012 audit of the FHA Mortgage Mutual Insurance Fund is fluid as we write and you will probably hear of later developments before you read this. The audit showed a gap of $2.8 billion, largely due to pre-Saver, pre-MIP increase, pre-housing recovery books of business, but HUD has made it clear policy actions will be taken in order to protect the future of the fund.
Even prior to the audit, Deputy Assistant Secretary Charles Coulter made it clear at NRMLA’s Annual Meeting in San Antonio that his department was concerned about the high ratio of fixed-rate, full-draw loans to other products. Ever since Coulter’s presentation, and immediately following the audit’s release, NRMLA’s board of directors has been meeting frequently to discuss proposals to HUD that might adjust the market while still protecting the existence of the product.
In Committees: CFPB Manual Addresses Risk and Compliance Committee Concerns
Earlier this year, we reported that the Risk and Compliance Committee submitted comments and concerns regarding the original version of the CFPB’s Supervision and Examination manual, the guide CFPB examiners use in overseeing companies that provide consumer financial products and services that was released in October. NRMLA executive staff and general counsel met in person with the CFPB regarding those same concerns.
In the new, updated version, the CFPB did indeed heed some of NRMLA’s concerns; noteworthy are the revised definition of the term “reverse mortgage”; the specific exemptions of reverse mortgages from such categories as high-cost loans; and the provision of special information booklets. Most importantly, however, is our success in getting the following language incorporated into the manual: “Because of the unique features of reverse mortgages, examiners should follow the procedures that are specific to reverse mortgages and be aware that other examination procedures may not apply to reverse mortgages.” (Under “Examination Procedures/Mortgage Origination, “Procedures,” page 4)
Impac Mortgage -- Irvine, CA
Lexington Investment Mortgage Company, LLC -- Lexington, KY
Senior Savings Reverse Inc. -- Lake Forest, CA
Coastway Community Bank -- Cranston, RI
Lance R. Canada, TowneBank Mortgage -- Raleigh, NC
Mace Kochenderfer, Stearns Lending, Inc. -- Albuquerque, NM
Colleen Moore, Golden Equity Mortgage -- San Diego, CA