In the States

MA Legislature Delays Face-to-Face Counseling Requirement Until 2016 In its final act before adjourning, the Massachusetts legislature passed an economic development bill that, among other things, delays implementation of face-to-face counseling in the reverse mortgage loan process for another two years.

NRMLA members have been aggressively arguing to Massachusetts legislators that they do not have the counseling capacity within the commonwealth at this time to implement such a rule without eliminating opportunities for many potential borrowers.

We will continue to monitor this pending legislation going forward. For the next two years at least, the origination process and counseling will continue as is.

The Market

Boston College: Average Worker Needs to Save 15% to Fund Retirement Research published by the Center for Retirement Research at Boston College concluded that the average American household must save roughly 15 percent of its annual income to sustain the same lifestyle in retirement.

The brief—entitled “How Much Should People Save?”—said that middle-income workers need the equivalent of 71 percent of their pre-retirement income to maintain their standard of living. Roughly 41 percent of a retiree’s income will come from Social Security, while the next largest source (21 percent) will be derived from retirement savings plans.

The Center for Retirement Research assumes in its research that qualified households will use a reverse mortgage to generate another 4 percent of their annual income.

Unplanned Child Support

Traditionally, when people make a plan for their retirement, they expect to support their children as best they can through their educational years and then, hopefully, the kids are on their own. But in the protracted wake of the recession, and partially due to behavior choices of the younger adult generations, support of children has become a frequent additional burden upon retirement planning.

At the recent Center for Retirement Research conference in Washington, Rick Miller, the keynote speaker and a certified financial planner with Sensible Financial Planning in Boston, reported that his firm has about 200 clients who are mostly not rich but have planned well for their retirement—and yet many of them have retirement funding issues. Often, the problem is their children.

Miller ran off a list of post-college issues that today’s young or even middle-aged adults face that are in need of support: big weddings, bad marriages and their results, costly housing in the cities they tend to drift toward, health issues, disappointing jobs or no jobs at all, entrepreneurism that goes awry and substance abuse.

The issue for retirees is: How do you plan for any of this? And this is in addition to the other great unknowns: health issues and longevity.

One potential solution for life’s cruel surprises is a HECM line of credit.

Events

Annual Meeting: Reverse Mortgage Reset in Miami Beach Sometimes you need to rethink the way you’ve been doing business.  With financial assessment, upfront draw limitations, new non-borrowing spouse rules, a changing consumer target base, increased interest from financial and estate planners, CFPB publication of consumer complaints and calls for face-to-face counseling in some states, this may well be one of those times.

Join our expert speakers and the largest annual gathering of your colleagues as we take a hard look at where we are as an industry and where we are heading at NRMLA’s Annual Meeting & Expo, “Reverse Mortgage Reset,” at Loews Miami Beach Hotel on November 10-12, 2014.

Registration is now open. Register today at nrmlaonline.org. Press

Positive Press Surges in June Driven largely by positive stories about HUD’s mortgagee letters addressing non-borrowing spouses and unacceptable advertising, as well as by bloggers, the press results for June are the most positive since we began auditing last August.

Overall, there were 195 positive stories nationally last month and just 14 negative stories, a 13:1 ratio or 93 percent favorable result.

Pros and Cons of Using Reverses to Pay Off Existing Liens

Polyana da Costa, a senior mortgage analyst/writer for bankrate.com, published an article that used consumer testimonials and comments from an academic researcher to explain why using a reverse mortgage to pay off an existing lien can sometimes be a wise strategy.

“Reverse mortgages have gained a bad reputation over the years, but they can be a useful financial tool to seniors when used appropriately,” says David Johnson, associate professor of finance at the University of Wisconsin-Superior and co-author of a recent study discussing the growing importance of reverse mortgages in retirement.

Nationally Recognized Economics Reporter Endorses New Reverse Mortgage In response to a consumer’s question about the drawbacks of reverse mortgages, Scott Burns, an economist, MIT graduate and one of the most respected financial columnists in the country, said recent reforms have lowered costs and transformed the product into a better financial tool for retirees.

“If you are retired, healthy and not dead broke, new research indicates that a reverse mortgage can be what they were hoped to be—another tool for managing retirement income and spending,” wrote Burns in a syndicated column that appeared in the Dallas Morning News and Seattle Times.

And Also

NRMLA’s Social Media Following Grows During the first three weeks of NRMLA’s new social media campaign, we saw a noticeable increase in followers on LinkedIn, Twitter and Facebook.

We now have 578 followers on Twitter—a gain of 40 people—and 36 more members on LinkedIn, bringing the current total to 2,269.

Another Record Month for Our Consumer Website

Visitation to our consumer website, reversemortgage.org, continues to swell. In June, we had 33,066 unique visits, another new record.

Newest CRMP NRMLA congratulates Vickie Nguyen of HighTechLending Inc., in San Diego, California, for achieving the status of Certified Reverse Mortgage Professional.

Eighty-four individuals have earned the CRMP designation since mid-2010, and every one of them is prominently listed on the NRMLA consumer website, at reversemortgage.org.

Just Joined NRMLA welcomes the following new members:

• Family First Funding, Toms River, New Jersey (Lender)
• Consolidated Credit Solutions, Inc., Fort Lauderdale, Florida (Counseling Agency)