Face-to-face reverse mortgage counseling is back in Massachusetts (for now)

Lawmakers are currently debating a law to relax the standard, but for now an extension has expired

Reverse mortgage professionals in Massachusetts will be reliant on their borrowers’ ability to complete their required counseling sessions under the state’s face-to-face mandate following the expiration of a provision temporarily relaxing the standard that expired on April 1.

This is according to prior legislative documents reviewed by RMD and an announcement this week by the National Reverse Mortgage Lenders Association (NRMLA).

In an email update to its members, NRMLA explained that a spending bill containing an amendment that would permanently allow for telephonic and video counseling was approved by both houses of the state’s legislature, but that the addition of new amendments to the Senate version had prolonged the process that would allow it to become law prior to the expiration of the last extension.

The issue has remained a specter over the state’s reverse mortgage business for years. Massachusetts is the only state in the country to require in-person reverse mortgage counseling, a requirement that caused issues and effectively halted its reverse mortgage business during the early days of the COVID-19 pandemic.

Industry professionals and trade organizations — including NRMLA and the regional Massachusetts Mortgage Bankers Association (MMBA) — have urged state leadership to adopt a more permanent solution. It looked as if one would pass last year, but a revision of the budget bill deliberated at that time included an amendment that removed the permanent allowance from a prior version approved by the State House.

George Downey of The Federal Savings Bank in Braintree, Mass.
George Downey

Reverse mortgage industry veteran George Downey of The Federal Savings Bank in Braintree, Mass. has been a critical figure in the advocacy for a permanent solution that would allow for remote counseling. While he remains apprehensive about the latest budget bill and whether it will include the desired language in its final form, he also shared that this time feels a bit different when compared to prior recent efforts to address this issue.

In addition to support from NRMLA and other trade associations, Downey said the outreach he and others have done on the issue has felt fruitful.

“We’ve done as much as I think reasonably could be done to get the information to the surface so that the conference committee members, when they were evaluating these various amendments, would have some sense of what this is about and how important it is,” Downey said in an interview. “So, I feel a measure of confidence in that regard. I’ll be optimistic and give us 50% odds.”

Part of the challenge in getting such a provision passed, he said, stems from longtime reputational challenges the reverse mortgage product has had that are difficult to challenge among lawmakers, he explained.

“It’s those old misconceptions, those old biases that carry a lot,” he said. “That’s just speculation on my part, but I’m pretty sure that that was the problem.”

Downey previously explained to RMD that there are only five full-time U.S. Department of Housing and Urban Development (HUD)-approved counselors serving the state. But the disruption caused by COVID-19 has helped lead lawmakers, regulators and the public to become more aware of how useful remote communication is today.

At the NRMLA Annual Meeting and Expo held last October in Nashville, HUD’s Deputy Assistant Secretary for Housing Counseling David Berenbaum alluded to the challenges in Massachusetts. He elected not to directly comment on them but said that there is no reason for HUD to believe that alternative delivery methods of counseling could not provide quality services.

“Our expectation at HUD is that the quality of the services should be maintained regardless of modality,” he said at the event. “And I do know from my experience in the space that superb housing counseling can happen in many different ways. It’s really the professional offering those services that make all the difference.”

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