Reverse Mortgage Trends: NY Proposal, HECM Purchase Program, and Upcoming Conference

Ever wondered how much Ben Carson is worth, where he puts his money, and how much money he earns? Here you go. His hearing is today for the HUD spot. "...it's difficult for a child to learn at school if he or she doesn't have an adequate place to live. In these situations, government can and should help. However, I believe we need to ensure that the help we provide families is efficient and effective...." Finding a place to live that is immune to this winter's weather is tough: California is receiving so much snow that some ski resorts closed.

The NRMLA reported that homeowners aged 62 and older saw an overall 2.6 percent increase of $152.0 billion in senior home equity in the third quarter of 2016, bringing the total to $6.1 trillion. The gains were largely driven by a 2.3 percent increase in senior home values. "The upward trajectory of the RMMI tells us that housing wealth continues to provide senior homeowners with a financial resource they can use to support their needs..." said NRMLA President and CEO Peter Bell. According to a recent report from Harvard's Joint Center for Housing Studies, only 29% of households on the cusp of retirement (aged 50-64) will leave the workforce with a traditional pension, compared to 49% of today's 65-and-older households.

For senior homeowners who want to learn more about converting a portion of their home equity into a liquid asset with a reverse mortgage loan, NRMLA has published three new guides available to download from our consumer education website reversemortgage.org.

With about 10,000 people a day turning 62 in the United States, with some of them actually being citizens and owning homes, the reverse mortgage biz is a growth industry. I mention this because New York's Governor Cuomo wants to "increase protections for seniors and expand regulations on reverse mortgages." "Governor Andrew M. Cuomo unveiled a comprehensive plan to better protect senior citizens throughout New York from financial exploitation and foreclosure. The plan includes establishing an Elder Abuse Certification Program for banks located in New York State, amending the banking law to empower banks to place holds on potentially fraudulent transactions, and strengthening legislation that will protect senior homeowners with reverse mortgages."

Besides training bank employees to recognize the signs of financial abuse, which most, if not all, banks do anyway, the Governor proposes new legislation further empowering banks to place holds on potentially fraudulent transactions in order to protect their consumers, and once identified and a transaction hold is applied, banks will be required to report to the appropriate state agencies to take action.

Of more interest to lenders, the press release stated, "Many New Yorkers over the age of 62 utilize lending products known as reverse mortgages. Misled and misinformed by advertisements, seniors often choose reverse mortgages for an additional income without fully understanding that payments are still required for all taxes, insurance, and home maintenance. As a result of these deceptive practices, many senior citizens face foreclosure because of a missed tax or insurance payment.

"Under current law, consumer protections available to homeowners are not provided to homeowners with a reverse mortgage. These protections include settlement conferences, which are provided to New Yorkers facing foreclosure. In order to safeguard seniors from the risks of reverse mortgages and provide equal protections to all homeowners, Governor Cuomo is proposing amending the Real Property Actions and Proceedings Law and Civil Practice Laws and Rules to include reverse mortgages. This will require that the same consumer protections be provided to all homeowners, regardless of the lending product they utilize. And the Governor will direct the Department of Financial Services to revisit and revise any rules and regulations pertaining to reverse mortgages. "This will help to prevent future foreclosures and further protect New York homeowners." Forget the CFPB... just try tangling with New York.

And Reverse Mortgage Daily reports that, "A series of controversial proposals for the Home Equity Conversion Mortgage (HECM) program introduced last year by the Department of Housing and Urban Development (HUD) are still under regulatory review, but it is unclear when the reverse mortgage industry might finally see some meaningful change-and whether such change could arrive before a new administration moves into the White House."

Home-equity-conversion mortgages, also known as reverse mortgages, jumped to a peak in 2009 then declined to less than half that volume. George Brooks with IMF Publications writes, "FHA reverse mortgage lenders capped the third quarter of 2016 with a 2.2 percent volume increase over the previous quarter, ending the first nine months with $11.0 billion in new Home Equity Conversion Mortgage loans. The year-over-year story, however, was different. For the nine-month period, HECM originations fell 10.5 percent compared to the same period a year earlier. Purchase HECMs comprised the bulk of originations, 86.3 percent."

Mr. Brooks noted, "Unlike in FY 2015, when the Mutual Mortgage Insurance Fund's healthy HECM portfolio helped pushed the capital reserve ratio above the statutory 2.0 percent requirement, the portfolio slipped into deep negative territory during FY 2016. The fiscal 2016 actuarial audit of the MMIF projected a negative $7.7 billion economic value for the HECM program, compared to a positive reading of $6.8 billion the year prior. Meanwhile, the economic value of the HECM Fund is estimated to hit a negative $12.5 billion at the end of FY 2023."

So as noted above, did you know that there is a "HECM for purchase program" out there? There is. "The HECM for Purchase (H4P) can be an attractive loan product within active-adult communities. This tool can help your age 62+ clients buy that dream home while keeping financial assets available for other uses - which gives them peace of mind. This concept recently got a positive shout-out from CBSand did a great job outlining the reasons for its use."

And if you're interested in the reverse side of the biz, don't forget that we're less than a month away from ReverseVision's UserCon 2017, February 8-10 in San Diego, CA. There will be plenty of talk about trends impacting mortgage lenders views of reverse loans, potential implications of lenders adding reverse products, how companies may benefit from these trends and more. Besides, who doesn't want to go to San Diego at this time of year?

Looking at forward mortgages, and mortgage rates, agency MBS prices did well Wednesday, relative to Treasury securities, but not well enough to really show up much on rate sheets. The usual sellers (primarily lenders) were in selling, and the usual buyers (led by the NY Fed at $1-2 billion a day) were in buying. Life goes on. The 10-year ended nearly unchanged yielding 2.37%, as did the 5-year, but agency MBS prices improved nearly .125.

But today is a brand spankin' new day, and we have six Fed speakers (including Chair Yellen) speaking today tonight. I guess that's one way to get a free lunch or dinner. We've already had the usual Initial Jobless Claims (+10k to 247k) as well as import prices (+.4%), for December. Prior to these numbers rates had already improved, and in the early going the 10-year is yielding 2.34% and agency MBS prices are better by .250 versus last night.

Jobs and Announcements

"Strategic Growth Partners 360 (SGP360) has entered into its 5th year of business impacting the mortgage industry. Chris Meyer, Managing Partner, said, 'The last 4 years have been extremely dynamic resulting in many strategically placed leaders & groups, leading to a very significant production lift for our clients. This required strong recruiting relationships that continue to shape the ever-changing landscape in the mortgage business.' To greater serve SGP360's select client base, they are proud to announce the addition of a long time mortgage veteran, Gary Gould, based in the Colorado market with national reach. Gary has over 40 years of mortgage experience across multiple platforms, a solid reputation of contribution and continuity of growth to the industry. SGP360 looks forward to an exciting 2017 as we continue to lock arms with the best companies and provide opportunities to all mortgage professionals looking for a better platform in which to thrive." Questions can be addressed to Managing Partner Chris Meyer.

Homeside Financial, one of the fastest growing independent mortgage banks in the country, is actively looking for Sales Managers and Branch Managers in the DC Metro Area. "Homeside was founded by industry veterans with a mission and dedication to always serve the sales process, placing the success of our originators as our first and foremost priority," announced Kevin Darcey, Sr. VP of Homeside Financial. "We leverage technology, dedicated operational teams, and common-sense underwriting strategies to provide the best experience for our originators which has led to consecutively being ranked a Best Place to Work in our market." If you are a sales manager looking for more opportunity, or a top producer looking for the next big step after production, reach out to Kevin Darcey. For a closer look at what it's like to work at one of the only mortgage companies Glassdoor acclaimed as a 'Best Place to Work' visit http://recruiting.gohomeside.com today.

Ditech Wholesale is hiring talented experienced Account Executives in key markets across the country. "With the rise in interest rates, we understand that territory expansion and alignment are now at a premium.  With our recent introduction back into Wholesale, we are in a fortunate position to have some wide open geographies, allowing our Account Executives the unique opportunity to be first in market and capture large footprints with more customers at their disposal.  With that in mind, our technology, infrastructure, and deep agency relationships empower Brokers and support Account Executive in creating and building strong business relationships.  Our leadership has proven success in strategically navigating through market volatility increasing our overall market share year over year."  Click Here to review the job description and apply today! You can also contact Owen Welch with questions.

The Independent Mortgage Bankers Conference is around the corner, an exciting conference with peers and experts to share information and ideas. Bank of Hope's Warehouse Lending experts will be at the conference January 23 - 25. "Reach out to Richie Walia or Mike Tenkerian to schedule a meeting; we still have a few appointment time available. Bank of Hope will assist in crafting customized solutions to your warehouse lending needs. Instead of a one-size-fits-all approach, we are here to create solutions to your specific needs. Put our expertise to work for you. Please contact Richie at (213) 637-5285 or via email WL.Sales@bankofhope.com to schedule your appointment."

Movement Mortgage reported launching "Movement Mortgage Marketing," or M3, a new proprietary marketing, sales and customer engagement platform powered by technology from Inc. "This is a difference-maker for our organization and our vision to be a movement of change in the mortgage industry," says Movement Mortgage Chief Brand Officer David King in a press release. Movement reported that the platform will help 2,000 sales professionals to better "manage their contact databases, connect with clients and prospects and spread their message through multiple media channels, including video, social media, email and print." Joe Welu, CEO of Total Expert stated, "Movement Mortgage is deeply passionate about innovation and building a company designed for the future of mortgage lending which makes them an ideal partner for Total Expert." To learn more about Total Expert, visit totalexpertinc.com. 

Congrats to Sharon Lowman (Weatherholt) who the Correspondent Division of Impac Mortgage has added to its team of Account Executives. The 30-year industry pro will cover the Northern California and Nevada markets. Sharon's high standards and commitment to professionalism have helped her excel in the industry, from the first half of her career selling MI, through the most recent 12+ years in correspondent lending and an Accredited Mortgage Professional designation from the MBA.

And First Community Mortgage announced that Lynn Elkin has joined FCM as a Regional Sales Manager. Lynn invested the past five years of her career as a Producing Branch Manager in Maple Grove, and will leverage more than 20 years of mortgage industry experience as she expands FCM's business in Minnesota and the surrounding states.

NRMLA welcomed four new Directors in 2017: John Button, the President and CEO of ReverseVision; Leslie Flynne, SVP of Loan Servicing for Reverse Mortgage Solutions; Michael Gruley, EVP of Reverse Mortgage Lending at 1st National Reverse Mortgage; and Michael McCully, Partner at New View Advisors. And the following slate of officers will serve 2017: Co-Chairs Joe DeMarkey of Reverse Mortgage Funding and Reza Jahangiri of American Advisors Group; Vice Chair Sherry Apanay, Finance of America Reverse; Vice Chair Mark Browning, HomeChex; Secretary Mike Kent, Liberty Home Equity Solutions; and Treasurer Jason McNamara, Celink. The complete list of NRMLA's Board of Directors and Officers is available on NRMLAonline.org.