6 Comments

1. 

   Boyd Uselton

   June 1, 2016 at 11:43 am

   Lowest volume that I can remember since HECMs started . These changes don’t seem to have helped anyone- more are on the way!! The Biz seems to be on its way out under the rule of Frank Dodd act. Does anyone see a time when we might be more friendly to the borrower?

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     The_Cynic

     June 2, 2016 at 10:43 am

     Boyd,

     Either you have been in the industry for less than two years or your short term memory needs some work since total endorsements for August 2014 were even lower — by 10.7%.

     What the Dodd-Frank Act has to do with the changes we are experiencing is a mystery. The changes have everything to do with the independent powers that the HUD Secretary was granted under the Reverse Mortgage Stabilization Act of 2013, not Dodd-Frank.

     We do not have to make stuff up. Yes, things in the industry are bad. What we need to do is stop exaggerating and knowingly misstating, and restrict ourselves to the facts. The fact is that it has been over a decade since we have seen total endorsements for the first eight months of any fiscal year lower than it is right now with all of the “advantages” that the “new” HECM provides us and, yes, HUD is even proposing MORE changes.

     Why do you need to make things up? Do you know the facts or have access to them? Making things up or misapplying them only gives fodder to those who support the changes.

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     James E. Veale, CPA, MBT

     June 2, 2016 at 6:01 pm

     Mr. Uselton,

     Here is a recent post I made on Linked In Reverse Mortgage Daily Group site:

     LET US TURN HECM ORIGINATOR CONVENTIONAL
     WISDOM ON ITS PROVERBIAL HEAD!!!

     For about the last 18 months, we have had far too much pessimistic talk about how poor business would do and was doing after financial assessment was implemented. For a month, some of us have been patiently waiting to see if the industry would discover a set of fascinating facts. So far if any discovered them, none reported them.

     BUT if we compare HECM endorsement numbers for the twelve months ended April 30, 2015 to HECM endorsement numbers for the twelve months ended April 30, 2016, how did we fare? Did endorsements go down by 25% or even 10%?

     The answer is they went up (yes up) by 4.35%. There is much to be said about why that is true but raw numbers state, that on a twelve month by twelve month basis, business literally went up!!

     Now let us look at the facts which the entire industry has had at its disposal through Reverse Marketing Insight’s (RMI) Total Endorsements for the Twelve Trailing Month ended April 30, 2015 and then ended April 30, 2016. The first twelve month trailing report (ended April 30, 2015) which RMI posted on 5/1/2015, states that there were 52,569 endorsements in that twelve month period. On May 2, 2016, RMI reported that there were 54,854 endorsements for the twelve month period ended April 30, 2016. The two reports can be found at:

     http://www.rminsight.net/wp-co…

     AND

     http://www.rminsight.net/wp-co…

     Being realistic requires being unbiased in analysis, i.e., not caring what lenders, originators, HUD, FHA, or NRMLA may like or dislike. Yet does that mean that our businesses are better off by having financial assessment? In that 12 month period the answer is a resounding “yes” (but from very few other current business perspectives).

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2. 

   the_critic

   June 2, 2016 at 10:55 am

   As to origination, RMS is now an industry joke. Immediately before the merger of Security One into RMS, who would have imagined RMS with more than 100 endorsements in a month or Security One with less than 100 endorsements per month? So to what new heighths have the combined senior management of Walter and RMS carried the origination operations of the former two competitors? Right DOWN to the level of what RMS was doing before the merger.

   Walter has not improved the industry but rather run the origination operations of two very complementary competitors straight into the ground. The only question is whether RMS origination operations can be salvaged at a reasonable cost.

   While Walter continues to tinker with the management at RMS, expect some ups on the way down.

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3. 

   Boyd Uselton

   June 7, 2016 at 8:47 am

   Thank you for your comments. Truly worth investigating. Speaking of which — For any one that’s interested please look into the Dodd-Frank act- what it creates and how it is funded. and the relationship it has to enforcement.. It is the single largest and most powerful act since the great depression in regard to lending, saving, reporting, funding , action taken and ongoing reformations and change in our Biz. It was passed 7-21-2010. A full three years before the Reverse Mortgage Stabilization Act of 2013,. A summery of Dodd – Frank can be found here
   http://media.mofo.com/files/uploads/images/summarydoddfrankact.pdf

   The Reverse Mortgage Stabilization Act of 2013, authorizes the HUD secretary to change MIP insurance that FHA put’s on our loans. Insurance was indeed changed as a result of this act- now instead of being separate insurance funds are held in a single account(fund) and the most visible change has been that insurance rates have been reduced for young borrowers. This act was proposed by Denny Heck(D) of Washington state. It was call out as H.R.2167 and passed 08/09/2013. I invite anyone to look it up and read it. It is very short..

   For those who wonder how long I have been in this Biz it is measured in decades not years. But anyone can be mistaken– I invite you to check this out .
   I am aware of the 3100 or so that got their loans in August of 2014 I have a copy of the report. showing things down over all at least 20% year to date for 8/2014. I am also aware of the trend in closings and benefits. Please try tracking those since 2010 to date and you will see what I mean.

   By the By- RMS/S-1 was stabbed in the back by it’s own originators which created a new company( which is doing quite well). However the New management now in place came from AAG and the companies entire Biz model is being changed– don’t sell out just yet.

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4. 

   The_Cynic

   June 7, 2016 at 11:20 pm

   Boyd,

   The Reverse Mortgage Stabilization Act of 2013 is not about MIP alone. Here is what it says: “…establish, by notice or mortgagee letter, any additional or alternative requirements that the Secretary, in the Secretary’s discretion, determines are necessary to improve the fiscal safety and soundness of the program authorized by this section, which requirements shall take effect upon issuance.’’

   This act actually allows the Secretary to do anything to the HECM program that the HUD Secretary believes is needed to improve the fiscal safety and soundness of the HECM program.

   If we go back to 2010, that provides no clarity as to the sole impact of financial assessment on endorsements. Many believed that the 12 months ended April 30, 2016 would provide clarity as to the lost business financial assessment created. That is why James wrote was so surprising. When comparing the endorsements for the 12 months ended April 30, 2015 to the endorsements for 12 months ended April 30, 2016, endorsements were actually greater after financial assessment.

   Yet despite the belief of when the impact of financial assessment would be seen in a 12 month period of endorsements, the key 12 month period is fiscal year 2015 endorsements when compared to endorsements for fiscal year 2016. The reason is each month before October 1, 2015 contained a substantial number of endorsements where the related application received a case number before April 26, 2015.

   As to August 2014, I am glad you have verified that it is the lowest endorsement count in more than a decade. Not even the endorsement count for May 2016 was lower.

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