Miami Beach: Industry Looks Ahead, HUD Reconfirms Commitment “You are now in the only room in America in which everyone understands what you do,” said NRMLA President and CEO Peter Bell in his opening remarks at the association’s 2014 annual Meeting & Expo in Miami Beach. The comment was both an acknowledgment of industry camaraderie and a call to action.

In the year since last year’s meeting, the 500-plus reverse mortgage professionals gathered at the beachside Loews Miami Beach Hotel had to share patience and adaptability as HUD implemented changes as a result of the Reverse Mortgage Stabilization Act—which, according to the department’s senior policy advisor, Karin Hill, “gave us the ability to control risk.” Over the same time, the Extreme Summit test pilot alerted us that we need to do a whole lot more educating.

In an opening general session, leaders of four companies discussed the “reset” required by the changes. AAG’s Reza Jahangiri expressed concern about “mass marketing on day 366” as we approach the 13th month following implementation by HUD of first-year draw limitations. During a HUD staff presentation, Hill said, “We are starting to see results from the changes. They are moving us in the right direction. We certainly hope borrowers will stick with the lower withdrawal patterns and not be encouraged to take out the balance of funds.”

Much of the three-day conference focused on methodology of implementation of the changes, as well as sales and marketing approaches inspired by them. Financial planner Rick Miller of Sensible Finance drew attention to unexpected costs to aging Americans of their adult children, a factor generally not considered in retirement planning. Michael Gordon of BNY Mellon, which has recently entered the market, showed how even the moderately wealthy who have responsibly saved can benefit from utilization of home equity in their retirement planning. Chris Herbert of Harvard’s Joint Center for Housing Studies presented results of a recent report on senior housing that showed vastly increasing mortgage debt amongst a sector that historically has paid off these obligations earlier.

Evaluating the summer-long Extreme Summit effort in Denver, Philadelphia and Seattle, Otto Kumbar of Liberty Home Equity Solutions showed that the media buys have not moved the perception needle among consumers, but national and local press have turned much more favorable in the wake of the product alterations. A brainstorming session on the future of this effort called for an industrywide, boots-on-the-ground educational effort.

Over the course of the conference, loan officers were able to obtain all eight of their annually required NMLS continuing education credits. CRMPs, representatives of community banks and new NRMLA members gathered to discuss with staff how the association can best serve them. The beautiful and roomy Expo Hall looking out on the beach remained crowded and chatty. (Some companies built exhibits almost homey enough to qualify for reverse mortgages.) Everyone seemed to relish the business on the South Beach streets and the variety of fine food nearby, and the background music for the week was predominantly Cubano.

In her keynote address, HUD Deputy Assistant Secretary Kathleen Zadareky thanked NRMLA for the leadership role it played over the past year and a half during the time of change. She then told the gathering, “My team is committed, I am committed and the secretary is committed to the HECM program.”

On the Docket: MMI Fund Sees Strong Two-Year Recovery In its 2014 Annual Report to Congress on the Financial Status of the FHA Mutual Mortgage Insurance Fund, HUD reported an impressive two-year gain of $21 billion, from a 2013 negative value of $16.3 billion to a 2014 positive value of $4.8 billion.

In his foreword, Housing Secretary Julian Castro wrote, “This year’s report shows FHA has successfully strengthened the fund while continuing to deliver on its core mission of serving responsible buyers.”

The increased economic value now represents a capital reserve of 0.41 percent, though a 2 percent reserve is required by law. In last year’s report, HUD estimated the reserve would return to 2 percent by next year. It now estimates reaching 1.5 percent in 2015 and continuing to grow subsequently as long as there is not another recessionary event that diminishes home values.

“The performance of FHA’s portfolio in FY 2014 continued trends seen in recent years, as newer books of business continued to vastly outperform those insured in prior years,” the report says. “Active loans that were endorsed in FY 2006 through the first half of FY 2009 continued to place substantial strain on the MMI Fund while books of business since 2010 show progressively better performance for each origination year.”

The report states that the “HECM portfolio is facing less positive momentum than the forward portfolio.” While the forward portfolio finished with an economic value of more than $6 billion, the HECM portfolio’s economic value declined to negative $1.2 billion. HUD states that changes made to the HECM program late in 2014 show improvements, as was also reported by HUD staff at NRMLA’s Annual Meeting. They expect 2015 improvements (including Financial Assessment) will also contribute to improved economic value. “FHA will continue to monitor progress of the actions taken to date and continue to make further adjustments to the program as needed, just as we have in 2013 and 2014.”

Additional HECM Program Actions for Coming Year

At NRMLA’s Annual Meeting, HUD Deputy Assistant Secretary for Single Family Housing Kathleen Zadareky said the program changes “are probably not quite over yet. We have a few more things to finish.” Additional actions in progress include:

• Publishing and implementing a revised HECM financial assessment and property charge set-aside guide
• Addressing policies regarding treatment of ineligible non-borrowing spouses
• Issuing proposed rules codifying all regulatory changes made under HECM Stabilization Act authority
• Drafting and publishing a new HECM Handbook to clarify and simplify rules

Presenting NRMLA 2015 Board of Directors Election of the NRMLA Board of Directors for 2015 took place at the association’s annual business meeting, held last week in conjunction with the Annual Meeting & Expo. The following individuals will serve as directors for one-year terms:

Joe DeMarkey, Reverse Mortgage Funding—co-chair

Reza Jahangiri, American Advisors Group—co-chair

Sherry Apanay, Urban Financial of America, LLC—vice chair Mark Browning, HomeChex—vice chair

Jason McNamara, Celink—treasurer

Steve McClellan, United Financial of America, LLC—secretary

Jeff Birdsell, ReverseVision Nick Buscaglia, M&T Bank D. Scott Clarke, Reverse Mortgage Solutions, Inc. Jim Cory, Live Well Financial, Inc. Colin Cushman, Generation Mortgage Company George Downey, Harbor Mortgage Solutions, Inc. Paul Fiore, American Advisors Group Michael Gordon, BNY Mellon Dave Hickey, Nationstar/Champion Mortgage Michael Hild, Live Well Financial, Inc. Otto Kumbar, Liberty Home Equity Solutions, Inc. George Lopez, James B. Nutter & Company Chris Mayer, Longbridge Financial, LLC Bob Sivori, Reverse Mortgage Funding, LLC Gregg Smith, One Reverse Mortgage, LLC Mary Smith, Liberty Home Equity Solutions, Inc.

In addition, the following individuals, who have all served previously as chairmen of the association, will serve as ex officio members of the Board:

Sarah Cavanaugh, 1st Reverse Mortgage USA Bart Johnson, Premier Home Equity James Mahoney, Celink Joe Morris, Open Mortgage, LLC John Nixon, Bank of America Jeff Taylor, Wendover Consulting

Distinguished Service NRMLA’s Annual Meeting in Miami Beach was an opportunity to honor those individual members who have provided unique service to the association for the benefit of all the member companies over the past year.

Distinguished service awards were presented to outgoing Board co-chair George Lopez of James B. Nutter & Company as well as to four members—Dan Hultquist (Generation, now with Open Mortgage), Lorraine Geraci (UFA), Craig Barnes (RMF) and Judd Lyman (Liberty)—who collaborated on restructuring and administering the CRMP Ethics training workshop.

Consumer Website Continues Surge The number of unique visitors to NRMLA’s consumer site, reversemortgage.org, exceeded 30,000 for the fifth consecutive month, according to October statistics.

Unique visits in October totaled 30,803, compared to 30,801 in September. They hit a record 33,066 in July.

Nearly 400,000 unique visitors will have visited the site containing your lender listings by year’s end.

Professionals Achieve CRMP Status NRMLA congratulates loan officers Rick Sweeney and Beth Patterson for achieving the status of Certified Reverse Mortgage Professional.

Rick is a loan originator with Open Mortgage in Incline Village, Nevada, while Beth is based in St. Paul, Minnesota, and works for Reverse Mortgages SIDAC, a division of Greenleaf Financial, LLC.

Eighty-eight individuals have now earned the CRMP designation since mid-2010.

Upcoming Events

• March 26-27, 2015, New York City, NRMLA Eastern Regional Meeting & Expo
• November 16-18, 2015, San Francisco, NRMLA Annual Meeting & Expo