Mutual of Omaha adds RMF talent to reverse division

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Mutual of Omaha adds RMF talent to reverse division

Mutual of Omaha is doubling down on reverse mortgages adding several of RMF’s top talent to its reverse mortgage division.

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Podcast E645: Who will be the next HUD Secretary?

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HECM Program Improves Valuation in FY 2020

A recent New York Times piece speculates who are the most likely candidates to take the helm of the Department of Housing and Urban Development in a Biden Administration

Other Stories:

  • HECM Refinance Boom: What comes after?

  • Private flood insurance may soon be an option for FHA borrowers
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You would have never guessed

“Housing America’s Older Adults”- The Joint Center for Housing Studies of Harvard University

Rewind back ten or fifteen years ago and you would have never imagined that the reverse mortgage would look as it does today. No other mortgage loan has seen such a dramatic transformation of its core components than the Home Equity Conversion Mortgage. If the constant evolution of the HECM proves one thing it is the growing need for older homeowners to convert a portion of their home’s value into a source of cash flow.

While it’s uncertain if or when three key significant HECM changes will be implemented, what’s undeniable is that more senior households are facing a cash-crunch in retirement. Lawmakers have few viable solutions outside of home equity that could avoid financial insolvency for older homeowners- a fact that may have spared the HECM program the ax some lawmakers had been willing to swing.

HECM professionals can be thankful for one gift this year- no announced further reductions of lending percentages or principal limit factors. Despite HUD’s lack of detailed data for why each loan was terminated or placed into default, the agency is confident that previous reforms like the Financial Assessment and PLF reductions have helped slow losses to FHA’s insurance fund.  However, such improvements remain difficult to measure until a larger statistical sample of recently-terminated loans is available and HUD’s aging technology is modernized. What is certain is that the housing crash of 2008 combined with full-draw fixed-rate loans sowed the seeds of HECM losses and FHA insurance claims that have afflicted the program in recent years.

Today the HECM has been transformed into a more robust program that has not only repaired most structural weaknesses but preempted many future risks. Who could have anticipated such a remarkable journey?

HECM October Changes- Survey Says

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Survey shows what HECM pros expect from HUD

As the final days of summer pass the collective tension of reverse mortgage professionals increases in anticipation of what changes HUD will make to the federally-insured reverse mortgage program. As August or September bring us the changes for the following fiscal year that begins in October we asked you for your top three guesses…


The HECM’s outlook to be shaped by 3 factors

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Three factors that will shape the HECM in 2020

What is presently shaping reverse mortgage production today, and what will influence our future?

First is the ‘feeder’ of all reverse mortgage endorsements. Before any federally-insured reverse mortgage is underwritten, has funds disbursed or is ultimately insured or ‘endorsed’ it begins as a case number- the identifier attached to every submitted HECM application. While most closely follow our monthly Top 100 lenders report, many are not looking at the leading indicator of future endorsement volume- Case Number Assignments– or perhaps a better term would be ‘reported applications’.

Case numbers aside the largest factor to influence future loan volumes is what HUD says or doesn’t say in the coming months. Traditionally August or September have heralded upcoming changes for the following federal fiscal year which begins each October. Will we see another round of cutbacks to the HECM’s principal limit factors, or another layer of loan requirements? While recent comments from FHA Commissioner Brian Montgomery show confidence in the improving financial health of the HECM program, there’s no denying the continued drain from previous HECM loans on the FHA’s insurance fund.

FHA’s 2nd Quarter report to Congress on the Mutual Mortgage Insurance Fund shows 2018 HECM claim payouts are on track to exceed 2017 by over


Truth in Numbers

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An honest assessment of HECM loan volumes & consumer demand

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Just where does the reverse mortgage industry stand today? Are we on the road to explosive growth, a mild recovery, or are lower loan volumes for the remainder of the year? Somewhere between extreme exuberance and pessimism lies our new reality. Since I’m going to take off my commentary hat for a moment, let us objectively review the numbers. 

First consumer demand as represented by FHA case numbers issued when a borrower’s application is submitted. Overlaying FHA case number assignments for 2017 and 18 above 2018 and 19 we can see that application activity has dropped considerably. Due to the government shutdown in December 2018 the best comparisons are in the months of February through July. What is clearly seen is the real-life impact of FHA’s October 2017 reduction of principal limit factors…