As the industry responds to an in-depth research report to Congress conducted by the Consumer Financial Protection Bureau and published in late June, the CFPB’s methodology has been questioned by industry members as well as third parties. While the agency made conclusions having to do with borrowers’ understanding of reverse mortgage products, the CFPB says in its explanation of methodology that it hadn’t spoken with any borrowers in its research process.
Given the lack of borrower input, another study has come to light again, this one commissioned by the National Reverse Mortgage Lenders Association, conducted by Marttila Strategies in 2010.
That study included personal interviews with borrowers, potential borrowers and family members of borrowers and potential borrowers, as well as focus groups. The findings were in stark contrast to the CFPB’s conclusion that reverse mortgage consumers need more information.
“The borrowers were very, very happy with [the reverse mortgage],” Marttila told RMD. “They were not misled. Their kids were supportive, or in some cases, they did not involve their kids. Enthusiasm for the product was unqualified.”
The research process was rigorous, Marttila says, but with the help of a company specialized in focus groups, the entire study was conducted in less than one month, with the focus groups working under a two-week deadline. In contrast, the CFPB conducted a thorough industry review but without the input of people who have taken out reverse mortgages.
“The omission of user satisfaction is a serious shortcoming; our research was rigorous and the results showed remarkably high user satisfaction levels,” Marttila says.
The survey was commissioned by NRMLA, but used an independent list of borrowers without any particular NRMLA affiliation. The findings still represented a departure from the CFPB’s study results.
“It’s very easy for people to criticize without digging in,” Marttila says. “If you’re sitting outside and looking at the alleged myths or [bad] practices you can criticize it. But it’s not right to write this report without talking to people.”
Written by Elizabeth Ecker
