Tickets for NRMLA's Annual Meeting Go on Sale HUD’s changes are in place. Members have adapted. Consumers are more secure. The press is responding well.
Now, what else can we do as an industry to expand our universe? Join your colleagues in Chicago on November 14-16 for the largest gathering of reverse mortgage professionals each and every year.
Hear from program officials and other guest speakers. Get your CRMP continuing education credits. Network with industry leaders. And help us continue to improve the reverse mortgage experience. Register at nrmlaonline.org.
Senior Home Equity Exceeds $6 Trillion in First Quarter
U.S. homeowners ages 62 and older are holding more than $6 trillion in equity, an increase of $164.9 billion from the last quarter of 2015. The NRMLA/RiskSpan Reverse Mortgage Market Index (RMMI) reached an all-time high of 209.12 in Q1 2016, up from 203.37 in Q4 2015.
The gains were largely driven by an estimated $169.7 billion increase in the aggregate value of homes owned by adults ages 62 and older, which was offset by a $4.9 billion increase in mortgage debt held by that age group.
Listen: Strategies for Keeping Older Adults Safe from Financial Predators
On June 15, NRMLA took part in World Elder Abuse Awareness Day 2016 by presenting an online tutorial, Strategies for Keeping Older Adults Safe from Financial Predators, for professionals who work with older adults.
Lorraine Geraci, CPC, veteran trainer and member of NRMLA’s Education Committee, did an exceptional job explaining the different types of financial abuse, describing common scams and fraud perpetrated against seniors, helping attendees recognize the warning signs of abuse and exploitation, and providing a list of resources for reporting abuse and supporting victims.
If you were unable to attend the tutorial or want to hear it again, visit NRMLA’s Combating Elder Abuse resource page and log in to nrmlaonline.org for a link to the recording. At the bottom of the page, you will find links to additional resources offered by the National Center on Elder Abuse, Federal Trade Commission, National Adult Protective Services Association and Consumer Financial Protection Bureau.
Blog Squad Rebuts Misconceptions
NRMLA’s Blog Squad was recently activated to respond to several inaccurate and negative comments posted to a cnbc.com article, “Strapped retirees are turning to reverse mortgages,” published on June 28. The original piece includes interviews with a HUD spokesperson and two financial advisors who explain the HECM program, recent policy changes and some perspectives on why homeowners might take advantage of a reverse mortgage.
Confused readers who took to the comments section to rail against reverse mortgage loans revealed a general misunderstanding of how HECMs actually work. Commenter Jonathan Hanley wrote: “It's shocking how this article fails to mention that reverse mortgages can be foreclosed upon if the homeowner draws all the equity. The homeowner is required to then make regular mortgage payments—which they can't afford. The bank then forecloses on someone in their late 70s.”
Blog Squadder Dan Hultquist, CRMP, of Open Mortgage, set the record straight with the following rebuttal: “Sorry Jonathan. That is clearly incorrect. Not sure where you picked up that misconception, but 'drawing all of the equity' has never been a maturity event that causes the loan to be due. In addition, I have never seen a reverse mortgage that required ‘regular monthly mortgage payments.’"
Greenleaf Financial’s Beth Paterson, CRMP, and Celink’s Mary Katherine Quasarano provided additional comments.
Members are invited to join and expand our Blog Squad. If you would like to participate, please email Jenny Werwa, director of public relations, at firstname.lastname@example.org to learn more about joining the team.
HUD Awards $11.84 Million in Housing Counseling Grants to Intermediaries HUD awarded more than $42 million in housing counseling grants to hundreds of national, regional and local organizations to help families and individuals with their housing needs and to prevent future foreclosures. HUD’s housing counseling grants, and the additional funding they leverage, will assist more than 1.4 million households find housing, make more informed housing choices or keep their current homes.
Among the grantees are national intermediaries and regional and local organizations that assist senior citizens seeking reverse mortgages. According to HUD’s press release, these agencies provide counseling for the rapidly growing number of elderly homeowners who seek to convert equity in their homes into income that can be used to pay for home improvements, medical costs and other living expenses.
The following national intermediaries were awarded a combined $11.84 million in funding: ClearPoint Financial Solutions, Greenpath, HomeFree, Money Management International, Nationwide Foundation for Credit Counseling and the Neighborhood Reinvestment Corporation.
Reverse Mortgages in the News
- “Reverse Mortgages Continue to Evolve,” by Rachel L. Sheedy from Kiplinger's Retirement Report, discusses the latest round of regulatory changes sought by HUD to further stabilize the HECM program. She encourages readers to visit the Lender Locator at reversemortgage.org to find a company in their area that specializes in reverse mortgages.
- “Reverse Mortgages Aren't for Everyone,” by Jeff Brown in U.S. News and World Report, paints a balanced picture of when reverse mortgages make sense as a retirement option. “Some experts recommend getting a credit line when conditions are good, as they are today, and holding it for a rainy day,” writes Brown. “Over time, the line will grow, as the home's value is assumed to rise, while some loan terms will be locked in when the loan is approved.”
- “Reverse Mortgages Have Improved, but Buyer Still Must Beware,” a column by Chicago Tribune personal finance columnist Elliot Raphaelson, says views on reverse mortgages have become more favorable. Raphaelson attributes this change in opinion to FHA’s policy changes that make it harder for families in poor financial condition to get a reverse mortgage, and lenders charging less and offering more attractive line of credit options. “The bottom line is that if you do your homework, a reverse mortgage may be advantageous to you if you intend to stay in your home for a long time,” writes Raphaelson.
- “10 Ways You Can Get More Money in Retirement,” by Selena Maranjian for The Motley Fool investment site, puts reverse mortgages at No. 5 and says retirees should consider one to deliver a welcome income stream.
- “48 Years Old and Nothing Saved for Retirement,” a column by CNN Money contributor Walter Updegrave, offers retirement savings advice to a 48-year-old who has worked consistently but has been unable to contribute to a 401(k) or other retirement account. Updegrave presents some solutions that include putting away 20 percent of every paycheck, looking for an employer who offers a 401(k) plan, and thinking ahead to opportunities to generate funds to supplement Social Security, such as with a reverse mortgage.
- Launi Cooper, Retirement Funding Solutions, Roseville, California
- Robert Hogg, Fairway Independent Mortgage, Portland, Oregon
- Kent Kopen, Home Point Financial, Newport Beach, California
- Ellen Skaggs, New American Funding, Tustin, California
- Sean Skaggs, New American Funding, Tustin, California
- Rick Williams, Banc of California NA DBA Reverse Mortgage Works, Irvine, California
- Bradley Arant Boult Cummings LLP, Birmingham, Alabama
- Cambria Mortgage, Eden Prairie, Minnesota
- InterContinental Capital Group, Inc., Jericho, New York