Conferences Kindle New HECM Era

Optimism filled the meeting rooms at the Intercontinental New York Times Square Hotel in March as more than 270 NRMLA members ushered in a new era for the HECM program.

“We are on the cusp of entering a new era of business,” said NRMLA President and CEO Peter Bell.

“We are excited to get on with it. It’s a new chapter for the industry,” said Reza Jahangiri, AAG’s chief executive officer and NRMLA co-chair.

Many of the sessions, including our Financial Assessment seminar, will be duplicated at NRMLA’s Western Regional meeting in Huntington Beach, California, May 11-13.

With implementation of Financial Assessment for all potential borrowers on the threshold, almost two years of changes in the program based on observing borrower behavior should be complete. “Financial Assessment is the last leg to the structural changes to make the program sustainable,” said Joe DeMarkey, principal at Reverse Mortgage Funding and NRMLA co-chair.

Sessions at NRMLA’s annual Eastern Regional meeting were characterized by a sense of relief that the changes would be in place, that they would eliminate much of the outside and often unfounded criticism of the product, and that they would provide additional security to borrowers and strengthen the FHA’s mortgage insurance fund.

In an opening four-hour Financial Assessment training session, members reviewed new procedures and presented case studies to prepare lenders for different potential scenarios. Paul Fiore of AAG said that new requirements would let lenders look at the way borrowers are living today and how that would be changed with a reverse mortgage. “A reverse mortgage is not a Band-Aid,” he said. “It is to improve the quality of life over time.” Each session that followed contained good news and built confidence that the new HECM is a better HECM.

Marketers presented creative approaches to educating an expanded group of younger borrowers most concerned with protecting their retirement assets. HUD staff illustrated projected increases in volume and the growth of the insurance fund reserve. Counselors hailed the availability of consumers’ financial statuses to help them provide a clearer understanding of a potential borrower’s options. And HMBS issuers welcomed a market of investors that is better educated, with a more avid interest in securitizations.

“HMBS required a huge educational curve,” said Mike McCully of New View Advisors. “The investment community had to get its heads around it. That’s been accomplished over the last two to three years.”

“The outside world sees more opportunities here,” Jahangiri said, summing up the optimism.

In the Press: Kiplinger’s Tackles Financial Assessment

In the March issue of Kiplinger’s Retirement Report, reporter Rachel Sheedy provides an in-depth overview of the financial assessment process and what it means for consumers.

Sheedy writes that lenders will have to look at all of the borrower’s income streams, such as Social Security and pensions, plus any additional resources, such as investments. Borrowers will have to provide documents, such as tax returns and bank account statements. Any credit trouble will have to be explained. The lender will determine whether the explanation qualifies as an “extenuating circumstance” in getting the loan approved.

“There will be an adjustment period for everyone,” she wrote, quoting AAG’s Fiore.

 On the Docket: NRMLA Comments on MOE Policies

NRMLA submitted comments to the U.S. Department of Housing and Urban Development seeking clarification on several issues pertaining to the new Mortgagee Optional Election (MOE) Assignment option.

The comments, compiled by the Servicing Committee with assistance from NRMLA’s outside legal counsel, are segregated into 10 categories:

• Available Paths for Mortgagee Election to Claim Payment
• Definitions
• The Ability to Purchase or Sell a HECM Property
• Mortgagee Election
• MOE Assignment Modification of Contract
• Eligible HECM Loans for MOE Assignment
• Reinstatement of MOE Assignment Deferral Period and Foreclosure Timelines
• Impact to First Legal Due Date (FLDD) Timeline
• MOE Assignment Calculating the PLF and Principal Limit Tests
• General Bankruptcy Question

NRMLA Seeks Regulatory Exemptions NRMLA submitted written comments to the CFPB this week seeking an explicit exemption for reverse mortgages from mortgage servicing rules that are being amended by the CFPB.

The rules primarily impact forward mortgage servicers. In a few cases where the language applies to reverse mortgage servicers, NRMLA offered substitute language to make the rules less onerous.

The comments, compiled by the Servicing Committee with assistance from NRMLA’s outside legal counsel, are segregated into the following categories:

• Changes relating to successors in interest
• The addition of a general definition of delinquency
• Changes regarding the manner in which a servicer must respond to requests for information asking for ownership information for GSE related loans in trust
• Certain amendments to disclosures when a servicer is required to force-place insurance
• Clarification of the early intervention live contact obligations and written early intervention notice obligations
• Changes and modifications to loss mitigation requirements
• Clarification of how servicers must treat periodic payments made by consumers who are performing under either temporary loss mitigation programs or permanent loan modifications
• Clarification of certain periodic statement disclosure requirements for modified mortgage loans and consumers who have filed for bankruptcy protection
• Changing the small servicer exemption to exclude certain seller-financed transactions from being counted toward the 5,000-loan limit.

Just Joined NRMLA welcomes the following new members:

• Consumer Education Services, Inc., Raleigh, North Carolina (Counseling agency)
• ENG Lending, Denver, Colorado (Lender)
• Emery Financial, Newport Beach, California (Lender)
• Foster Pepper PLLC, Seattle, Washington (Law firm)
• Fairway Independent Mortgage Corporation, Marshfield, Wisconsin (Lender)
• Lineage Lending, Carlsbad, California (Lender)
• Springwater Capital, Heber City, Utah (Lender)

Professionals Achieve CRMP Status NRMLA congratulates the following individuals for earning the Certified Reverse Mortgage Professional designation:

• Roberto Crespo, PS Financial Services, Coral Gables, Florida
• Shane Lester, Reverse Mortgages of Arkansas, Little Rock, Arkansas
• Tony Miller, Credit Union Mortgage Association, Inc., Fairfax, Virginia
• Bruce Simmons, American Liberty Mortgage, Inc., Denver, Colorado

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

Consumer Site Visits Surpass 35,000

Unique visits to NRMLA’s consumer site, reversemortgage.org, totaled 35,077 in March—the second-highest number ever. A record 36,249 unique visitors came to the site in January and traffic remained strong in February with 32,990 unique visits.