Federal Court Rules in NBS Cases; Credits and Birdies in Miami Beach

On the Docket The United States District Court for the District of Columbia issued a Memorandum Opinion on August 28, 2014, in the consolidated Bennett and Plunkett HECM non-borrower spouse (NBS) cases.

The court ruled that:

• HUD’s Mortgagee Optional Election program is not arbitrary and capricious. The court noted that HUD planned eventually to apply this program to all non-borrowing spouses, as indicated in FHA Info #14-34. The court ordered summary judgment in favor of HUD on this point.
• HUD’s failure to fully analyze the possibility of delaying foreclosure until a given HECM loan reaches 98 percent of its maximum value was arbitrary and capricious, and this portion of HUD’s decision was remanded to HUD for further consideration.
• HUD cannot be compelled to take assignment of the four HECM loans represented in the lawsuit.
• The plaintiffs’ motion for class certification was denied without prejudice.

This overview is only a brief summary of fairly complex procedural legal issues and decisions as outlined in the court’s 32-page opinion that comes as part of litigation that spans several years. Moreover, the plaintiffs will have an opportunity to appeal the court’s summary judgment ruling.

NRMLA will continue monitoring this matter and report on any new developments. Nonetheless, individual NRMLA members and their counsel should consider this latest opinion with care as they continue to originate and service HECM loans.

Report: U.S. Unprepared to Assist Aging Population, But Reverses Can Help While America struggles to meet the housing needs of its aging population, reverse mortgages remain a valuable source of funding for older Americans who have financial and other retirement needs, according to a new report published this week by the Harvard Joint Center for Housing Studies and AARP Foundation.

Titled “Housing America’s Older Adults—Meeting the Needs of An Aging Population,” the report estimated the number of adults in the U.S. aged 50 and over will grow to 132 million by 2030, an increase of more than 70 percent since 2000. It also noted that housing that is affordable, physically accessible, well-located, and coordinated with supports and services is already in short supply.

The report concluded that high housing costs currently force a third of adults 50 and over—including 37 percent of those 80 and over—to pay more than 30 percent of their income for homes that may or may not fit their needs, forcing them to cut back on food, health care and, for those 50-64, retirement savings.

States have implemented property tax relief as one possible solution to address housing cost challenges, while at the federal level, the report singled out HUD’s Home Equity Conversion Mortgage program.

“Reverse mortgages can be particularly helpful to lower-income households holding most of their wealth in home equity,” said the report. “For example, reverse mortgages can be used to convert a portion of housing wealth into an income stream to help cover property taxes and insurance payments, the costs of supportive care, and other living expenses. The ability to choose either a lump sum or a line of credit can assist homeowners in paying for one-time, big-ticket expenses, such as home modifications or improvements.”

In the Press: NRMLA Publishes Pushback The Sandusky Register published a letter submitted by NRMLA President and CEO Peter Bell in response to one local attorney’s attempt to discredit the reverse mortgage program based on a single client’s experiences.

The letter, titled “Reverse mortgages help many seniors in retirement,” reads as follows:

I was disappointed to read Dan McGookey’s recent column in the Sandusky Register on the subject of reverse mortgages. (“Avoid reverse mortgages: Alice’s story” Register, Aug. 21, 2014).

It’s important your readers understand that the piece is one attorney’s attempt at self-promotion, based on one family’s experience with a reverse mortgage.

And while it may serve as an effective marketing tool for Mr. McGookey, it does a disservice to the many seniors who depend on reverse mortgages, as well as those who are considering this important financial tool.

Reverse mortgages allow homeowners 62 and older to take out a government-insured loan based on the equity they have put into their home. They allow seniors to spend their later years in their own homes, while meeting their financial obligations, and not burdening their loved ones.

Like a traditional mortgage, reverse mortgages can be complex. Unlike other financial products, however, all potential reverse mortgage borrowers must meet with a certified counselor to ensure that they understand the terms before they move forward.

In the event that borrowers find themselves in a situation where they are unable to meet the terms of their loan, the best thing to do is to contact the loan’s servicer so that they can work with the lender to develop a solution. The reverse mortgage industry has worked for years to improve the product and tighten federal rules surrounding them. We have made great progress, and the majority of today’s borrowers report satisfaction with the product. They might be surprised to see Mr. McGookey’s reckless characterization of reverse mortgages, but it would be even more unfortunate if potential borrowers shied away from the product based on his sweeping, yet false conclusions.

WA Paper Cites RM Stabilization Act in Endorsing Heck An editorial published this week in The Olympian (Olympia, Washington) endorsed the re-election of Congressman Denny Heck (D-WA) in part because of his success at shepherding the Reverse Mortgage Stabilization Act through Congress and getting it signed into law last summer.

“For a freshman in Congress, Heck has had a surprising impact,” said the paper. “It’s rare that congressional rookies are the prime sponsors of legislation, and even rarer for a new member of the U.S. House minority to have a bill passed. But Heck accomplished this with the Reverse Mortgage Stabilization Act.

The editorial goes on to say, “The bill, signed by President Obama a year ago, required the Federal Housing Administration to make reforms to stabilize its reverse mortgage program so that elderly people with a legitimate need can continue to benefit.”

Congressman Heck co-sponsored the Reverse Mortgage Stabilization Act with Rep. Michael Fitzpatrick (R-PA), who is also running for another term.

Association Business: Credits and Birdies

What’s new at this year’s NRMLA Annual Meeting & Expo? Credits and birdies.

In addition to all the other benefits of attending the largest annual gathering of reverse mortgage professionals, this year, for the first time, you can accumulate all eight of your required NMLS continuing education credits.

And, in addition to our popular networking events, join three of your colleagues for a beautiful round of golf at the Miami Beach Golf Club on Wednesday afternoon, November 12. You can get a lot of business done over the course of 18 holes.

To join us November 10-12 at Loews Miami Beach Hotel, register at nrmlaonline.org.

 ICC Adopts Elder Abuse CE Requirement 

NRMLA’s Independent Certification Committee, which administers the Certified Reverse Mortgage Professional program, has adopted a continuing education requirement for current Certified Reverse Mortgage Professionals to complete a minimum of one hour of elder abuse course work within three years of earning the designation.

Candidates pursuing future CRMP designation who successfully complete the elder abuse course as part of their application process, and then pass the exam, will not be required to retake the course during the three-year certification period.

Additional details will be published in the Candidate Handbook and Recertification Handbook, which are posted to nrmlaonline.org.

Furthermore, NRMLA will be offering a course at the Annual Meeting & Expo, November 10-12, titled “Financial Safeguards for Older Adults,” which qualifies as an approved course under these new guidelines. All conference attendees are encouraged to attend the presentation, which has also been approved for one NMLS credit.

To learn more about the CRMP designation, please visit nrmlaonline.org.

Consumer Website Takes Another Leap

It seems as if every month in this column we’ve been reporting a new record of visitors to NRMLA’s consumer website, reversemortgage.org, which includes our lender directory. Well, this month is no different. In August, the visitors took another 20 percent leap: 39,600 people visited the site looking for information about reverse mortgages and lenders who can help them.