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“What?” you may be saying. Really? This last year has been one of the most challenging in recorded history for our industry. True enough. But yet there are ten reasons we can smile in 2010.

1. PLF (Principal Limit Factor) Cut was less than anticipated

Before the final mortgagee letter was issued by HUD many anticipated 20-30% cuts in available proceeds for borrowers. The good news was the cuts were much less severe and less disruptive than those in fiscal year 2009.

2. 4.99% Floor

This one took most (even industry insiders) by surprise. Our current interest rate environment worked in our favor to provide a lower “floor” on which max proceeds are calculated. In fact, despite cuts in the PLF some borrowers stood to gain more proceeds than the months before.

3. Appropriation nightmare avoided

Active lobbying on the part of NRMLA and other groups helped communicate the importance of the HECM program. Without this effort we may have been vulnerable to larger cuts in proceeds or worse.

4. No Max

In years past there was a limit of how many HECMs could be endorsed in a given fiscal year. We have avoided a cap this year.

5. Extension of lending limit increase

As part of HERA (Housing and Economic Recovery Act) in 2008, we saw lending limits for HECMs increase to $625,500. There was concern this limit would roll back to the previous $425,500. It did not. Smile again.

6. Technology meets compliance changes

With rapidly changing regulations for RESPA, TIL and counseling, reverse mortgage loan origination software companies had to be agile and fast. Updated disclosures and forms have been a relief to avoid delays.

7. HUD counselor and borrower can be on the same page

Another benefit of improved technology is the ability for the HUD counselor and borrower to look at the same loan comparison, amortization and TALC sheets. Innovative companies like ReverseVision and Ibis have been instrumental in providing this solution to reduce borrower confusion.

8. Profits spur lower costs

With investors willing to pay generously for HMBS (HECM mortgage-backed securities), lenders were able to give back to the borrowers with reduced costs, eliminated loan origination fees and more. A win for the borrower and a win for the industry with good PR about reduced costs.

9. Family & friends

Without their support surviving this last year would have been challenging.

10. HECM Saver

Last but not least, the HECM Saver. It’s not just about the lower costs and flexibility, it spared our industry an uglier situation when it came to the budget subsidy request we needed.

The Federal Reserve has passed an interim rule (read more here) that effectively eliminates the controversial HVCC (Home Valuation Code of Conduct). Many originators and industry professionals agree that appraisal independence is needed but not on how to achieve that end. Without the HVCC will much really change? What are your thoughts?

Post your comments below…