Pricing exceptions are widespread in mortgage — and so are the regulatory risks

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Reverse Mortgage Certifications: Raising the Bar

As government activism further ramps up and the mortgage world feels the impact, lawmakers are increasing demands on loan purveyors of all stripes to be taught, tested and tagged. “The big moment for all of us is the SAFE Act,” says Ken Markison, assistant vice-president and regulatory counsel, Mortgage Bankers Association, referring to the Secure and Fair Enforcement Mortgage Licensing Act (Act). “It’s about requiring originator licensing and registration for both federal and state originators (individuals),” says Markison, noting that 36 states have initiated some kind of new regulatory restrictions.

In an effort to blunt and head off some of that regulatory pressure, the National Reverse Mortgage Lenders Association says it spent $300,000 to develop a new industry designation called the Certified Reverse Mortgage Professional – Loan Originator. Before they can sit for a 140-question exam that leads to earning the designation, candidates must have a minimum of two years originating reverse mortgages (and 50 loans closed), 12 hours of continuing education and submit to a background check. The first group of candidates is expected to earn the designation in 2010.

“As we make this designation known,” explains Sherry B. Apanay, senior vice-president, Generation Mortgage Company and a member of NRMLA’s Independent Certification Committee, “seniors can seek out those with the designation and expect the most knowledgeable and ethical service from [them].”

“There is a need for certification,” says Shannon Hicks, vice-president of product development, Reverse, Redding, Calif., “because the bar of entry [has been] really low. There’s no real requirement for even HUD counselors to pass a background check,” he maintains. Hicks says there is a need for certification now “because of the increased patchwork of ‘do-gooder’ legislation that will be harmful to the industry. It’s almost too late, to be honest,” he adds glumly, reckoning that the swell of new regulations is really a backlash. “We’re inheriting the pent-up anger and frustration of the subprime industry. My biggest gripe with lawmakers is that they are masters of unintended consequences [and] most of them have no experience in finance or lending.”

But, even though “the reverse mortgage business has had somewhat of a tainted past,” argues New York attorney Neil Garfinkel, “today’s product is terrific, with lots of protections. The industry today,” he adds, “is concerned about its image.”

Neil J. Morse has been a communications professional working in the mortgage finance industry for more than a decade, currently specializing in the reverse mortgage sector. He can be reached at [email protected]

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