On the Docket: NRMLA Pursues Addressing Issues Raised by CFPB In the wake of the CFPB press conference in June accusing reverse mortgage company advertising of being “misleading,” NRMLA has reached out to the bureau requesting to view the 97 ads shown to focus groups to help clarify and address the issues. NRMLA has also requested the ads under the Freedom of Information Act (FOIA), which allows members of the public to access information from the federal government.
NRMLA has a long history of working with government agencies and the reverse mortgage industry to address issues and improve the HECM program. This includes working with HUD to encourage passage of the Reverse Mortgage Stabilization Act of 2013 to provide the agency with the authority to make changes to the HECM program that would secure borrowers and strengthen the Mutual Mortgage Insurance Fund.
“When we work with the people who raise issues, we find together we can solve them,” says NRMLA President and CEO Peter Bell.
Compliant and appropriate advertising has been a stipulation within NRMLA membership and the association has implemented an ongoing series of initiatives to try to assure adherence. These include:
- The requirement of signing a Code of Ethics and Professional Responsibility to become a member and as a requirement for annual renewals
- An Ethics Committee that reviews advertising of both member and non-member companies and pursues actions when they are noncompliant
- The issuance of advisories to members that re-emphasize the requisites of compliance
- A list of unethical advertising practices that is both distributed to membership and posted on our websites
“The CFPB indicated that some of the ads were compliant from a legal and regulatory standpoint, yet they took issue with them nonetheless,” Bell says. “To be able to properly and promptly address this issue with the advertisers, we need a more detailed discussion with the CFPB staff.”
At Our Conferences: What You Missed at Our Western Regional Presentations by FHA Senior Policy Advisor Karin Hill and Social Security expert Russell Settle at NRMLA’s Western Regional Meeting in Huntington Beach in May included valuable information.
Hill’s presentation focused on some early results of the changes to the HECM program over the past year and a half. Among them:
Interest Rate Type—During the past two years, the percentage of HECM borrowers choosing a variable interest rate has risen from 39 to 82 percent.
Initial Cash Draws—In FY2015, two-thirds of HECM borrowers with a variable interest rate have withdrawn 60 percent or less of the available loan proceeds at closing, while 88 percent of borrowers who selected a fixed rate used 90 percent or more of their funds.
Payment plan breakdowns—In FY 2015, 92 percent of HECM borrowers selected the line of credit option, a slight increase from 2014.
Maximizing Social Security Benefits Russell Settle, founding partner with SocSec Analytics, LLC, explained to conference attendees that individuals and couples lose substantial sums of money by claiming benefits at the wrong time.
As an example, he used Fred and Mary, who are both 61. Their Social Security benefits at age 66 are $2,400 (Fred) and $1,200 (Mary). Fred’s life expectancy is 82 years and Mary’s is 86 years. Both claim benefits at age 62, leaving $185,000 in potential benefits on the table. The number increases to $300,000 if they both live to age 90.
While many people cannot afford to delay claiming, a reverse mortgage may provide the financial resources needed to do just that.
To avoid losing $180,000 to $300,000 in potential Social Security benefits, Fred and Mary should delay claiming until age 70. To finance an eight-year delay in receiving benefits, they need at least $15,000 a year ($120,000 total) to supplement their other retirement funds.
A reverse mortgage for $120,000 or more could easily finance this delay, allowing Fred and Mary to greatly increase their overall Social Security benefits. To learn more, visit socialsecuritychoices.com or contact Settle at [email protected].
In the Press: New NRMLA Blog Squad Ready to Spread the RM Gospel Online (From Jenny Werwa, NRMLA director, public relations)
Myths and falsehoods about the reverse mortgage abound on the Internet. Sometimes they appear in articles written for newspapers, magazines and blogs; other times the misinformation is propagated by readers who comment on those stories. The comment section presents an opportunity for NRMLA members to debunk these myths with facts, clarify misconceptions and direct readers to reversemortgage.org for more information about the product.
That’s why NRMLA is launching the Blog Squad, a team of members who can quickly post the facts about reverse mortgages in the comments section of online news stories.
Together, the Blog Squad will promote the value, safety and borrower satisfaction of reverse mortgages online.
If you’re online and see misguided comments about reverse mortgages, please email Jenny Werwa ([email protected]), who can alert and activate the Blog Squad immediately.
In Publications: Borrower Snapshot This week, NRMLA shared its first infographic on Facebook and Twitter. The eye-grabbing graphic quickly tells the story of reverse mortgages with statistics gathered from NRMLA’s New Snapshot of Borrowers.
On Our Consumer Site 
NRMLA’s consumer site, reversemortgage.org, averaged 33,947 unique visits between January and May—a 20 percent rise from last year. Monthly site visits averaged 28,259 visits in 2014 and 19,561 visits in 2013.
A record 36,249 unique visitors utilized the site in January.
With all this traffic, you will want to make sure your complimentary lender listings are still current. If changes are necessary, please email them to Darryl Hicks at [email protected].
New Members NRMLA welcomes the following new members:
- California Freedom, located in Fullerton, California
- Peoples Bank, located in Irvine, California
- Reverse Mortgages.com, Inc., located in Columbia, Maryland
Following NRMLA on Social Media If you want to receive breaking news on important industry and retirement issues, we encourage you to follow NRMLA on LinkedIn, Twitter and Facebook.
Links to these social media resources can be found at the bottom of the homepage on nrmlaonline.org.
