NRMLA president: A look at state laws impacting the reverse mortgage industry

In this commentary, Steve Irwin provides insight into NRMLA’s priorities and some of the public policy measures that could impact the reverse mortgage business

The first quarter-and-a-half of 2023 has been a wild ride. We have seen huge fluctuations in production, mergers, acquisitions, new entrants into the reverse mortgage space, and less than graceful exits from the space. All the while, the National Reverse Mortgage Lenders Association (NRMLA)’s membership has continued its steadfast support of the association and shares with me its commitment to the huge potential of our industry.

With that understanding, I thought it might be helpful if I took some time to share what it is that NRMLA has been working on recently through its Board of Directors and its committee structure, and what we, as an association, are focused on in the coming months.

These strategic imperatives are in addition to the varied committee work, managing our Certified Reverse Mortgage Professional (CRMP) designation program, publishing member updates and alerts, developing educational content for webinars and in-person conferences, and publishing our Reverse Mortgage magazine.

Broadening accessibility, MBA/MISMO working group

One of our key focus areas has been examining how we, as an industry, can broaden accessibility to reverse mortgage programs in boldly creative, yet responsible ways. Some of the recommendations that NRMLA, and its Board of Directors, continue to carefully consider include exploring ways to reduce the Initial Mortgage Insurance Premium (IMIP) for a defined portion of the available Maximum Claim Amount.

For example, borrowers in lower-valued homes face higher closing costs as a percentage of available loan proceeds. This has created a barrier to accessing equity for many lower- to moderate-income seniors, so such an adjustment in IMIP may enable more of them to effectively age in place.

Steve Irwin, president of the National Reverse Mortgage Lenders Association (NRMLA)
Steve Irwin

We are also examining ways to increase incentives for borrowers who may wish to only access a smaller portion of their available equity. Such smaller dollar reverse mortgage loans may broaden the product’s appeal to senior homeowners who are looking to close smaller retirement financing gaps.

NRMLA is also working on finding paths to increase incentives to fund home improvements that might increase energy efficiency and/or home modifications which help ensure the collateralized property can properly accommodate the borrower’s ability to continue to age in place.

I am pleased to share that NRMLA has also been deeply involved in working with the Mortgage Bankers Association (MBA) and the Mortgage Industry Standards Maintenance Organization (MISMO) to clear the necessary governance hurdles and get approval to enhance the MISMO model to support the unique characteristics of reverse mortgages from origination through servicing, to secondary marketing and securitization; for both documents and datasets.  Developing such standards will attract more entrants into the marketplace, broaden product distribution and enhance accessibility to the product.

Industry liquidity, state policy

One of the major headwinds in the reverse mortgage space, as evidenced by the bankruptcy of one of the industry’s largest participants, is the liquidity pressure that Home Equity Conversion Mortgage (HECM)-backed Securities (HMBS) issuers are under in the current macroeconomic environment. The act of having to purchase HECM cases out of Ginnie Mae pools when that case reaches 98% of its Maximum Claim Amount requires the use of an HMBS issuer’s capital or third-party financing.

If that case that is bought out of the GNMA pool is not then assignable to the U.S. Department of Housing and Urban Development (HUD), then that case remains on the Issuer’s balance sheet, creating additional pressures and distortions. While these issues are complex and drawing the attention of all counterparties, NRMLA is actively in communication with HUD and Ginnie Mae and exploring ways to provide much-needed liquidity relief to our marketplace. 

It’s important to note that a lot of our efforts over the past several months have been focused on working with members and our outside general counsel on state legislative matters. Thanks to the support of a strong team of CRMPs in Massachusetts, H. 3548 was passed to allow senior homeowners to avail themselves of telephonic and/or video HECM counseling if they so choose.

It was a CRMP in Colorado who alerted us to some problematic language for reverse mortgages that was winding its way through the State House. In quick coordination with this member, NRMLA’s outside counsel, and the legislator in Colorado who was sponsoring H.B. 1266, we were able to ensure that proper consumer protections for victims of natural disasters in Colorado remained in place, while at the same time mitigating lender risk.

Thanks to the tireless effort of one of NRMLA’s co-chairs, the risk of a couple of problematic reverse mortgage bills in Texas has also been mitigated.

Federal policy, looking ahead

Our advocacy on public policy has extended beyond the state level these past few months. NRMLA regularly interacts with members of the U.S. Senate on the Banking and Housing Committee and the Appropriations Committee.

In the U.S. House of Representatives, we remain engaged with the Financial Services Committee and the Appropriations Committee. We have also worked to deepen our relationship and coordination with the Consumer Financial Protection Bureau and the National Consumer Law Center.

Yes, it has been a turbulent start to 2023, but, as you can see, NRMLA and its staff, its Board of Directors, and its committees remain committed to moving our industry forward.

This column does not necessarily reflect the opinion of Reverse Mortgage Daily and its owners.

To contact the author of this story: Steve Irwin at

To contact the editor responsible for this story: Chris Clow at [email protected]

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