[Updated] Reverse counseling issues in MA get a temporary fix

While a permanent solution appeared plausible, legislative reconciliation led to another temporary extension that the state's governor has signed into law

A Massachusetts budget resolution has been signed into law by Gov. Maura Healey, and while it was initially believed that the budget would earmark a permanent allowance that facilitates remote phone or video counseling for the state’s reverse mortgage professionals, the legislature has instead implemented a 12–month extension, which expires in March 2024.

Indications are that the language allowing for a permanent solution did not survive the reconciliation process between the state House of Representatives and Senate, which is required for a bill to be signed into law. However, some industry participants are optimistic that a permanent solution could happen, considering how close this one came.

Current relief extension

The last time allowances were made for remote reverse mortgage counseling in Massachusetts was the summer of 2022, which pushed the deadline to March 31, 2023. The relief will now be pushed to March 31, 2024, according to an amendment to a budget bill.

Gov. Maura Healey of Massachusetts
Gov. Maura Healey

The issue will remain a specter over the state’s reverse mortgage business until a permanent solution is codified into state law. Massachusetts is the only state in the country to require in-person reverse mortgage counseling, a requirement that caused issues during the COVID-19 pandemic.

While industry professionals and trade organizations have reportedly urged state leadership to adopt a more permanent solution, the revision of the budget bill included an amendment that removed the permanent allowance from a prior version approved by the House.

When asked about the momentum on the latest potential fix, and the likelihood of another temporary solution, Harbor Mortgage Solutions Founder George Downey — who with partner Brett Kirkpatrick has spearheaded the effort to change the law — was optimistic.

“Well, as I’ve said before, a half a loaf is better than no loaf,” Downey said.

Future outlook

Downey and Kirkpatrick said they’re appreciative of the support they’ve received from organizations like the Massachusetts Mortgage Bankers Association (MMBA) and the National Reverse Mortgage Lenders Association (NRMLA). The reconciliation process, however, will mean that involved parties will have to revisit this issue again when the next deadline nears.

“The final version did not include a permanent solution, but an extension for one year,” Downey said. “So while that preserves business as usual for the next year, it doesn’t solve the problem.”

When asked about the progress and whether it feels like a permanent solution is more attainable, Downey sounded hopeful.

“I think that we’re considerably farther along,” Downey said. “The language change to make it permanent was received unanimously by the House, and the whole notion of telephone and video counseling was really alien when this whole process started in 2010.”

Normalization of video conferencing

Since then, the remote counseling necessity has only grown more pronounced, Downey said. There are only five full-time counselors serving the state, in addition to the disruption caused by COVID-19, and lawmakers, regulators and the public are more aware of how useful remote communication is today.

“Video conferencing has become more of a norm than an exception,” Downey said. “So, I think people are understanding that. The basic underlying problem, I think, issue-specific for this whole thing, is just the lack of understanding that people have about reverse mortgages. But I think as we go forward, it’ll become a lot easier.”

Editor’s note: This story was updated after it was announced that Gov. Healey signed the bill containing the temporary extension for remote reverse mortgage counseling.

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