HECM improvements will pay dividends

The focus on foreclosure prevention and servicing will pay dividends for both consumers and industry participants alike

It’s a fact every salesperson and reverse mortgage professional must embrace- the vast majority of consumers inherently distrust salespeople. Will recent HECM changes help bolster the product’s legitimacy in the public eye? How will you approach the nuances of future policies and present them to homeowners?

The irony is that every major purchase from buying a home, a car or investing in your retirement entails working with a sales professional. The same applies to reverse mortgage professionals who approach a distrustful public. Further compounding this general skepticism are products whose unique features are highly advantageous leading many to say ‘if it sounds too good to be true, it probably is’. The good news is that recent changes to the federally-insured reverse mortgage may have helped us close the credibility gap.

It can be argued that recent changes to the Home Equity Conversion Mortgage may help improve the loan’s reception and close the credibility gap. The Financial Assessment raised the bar of entry excluding homeowners with a questionable credit history and late tax and insurance payments. Now Congress is looking to HECM loan servicers to modify their communication with borrowers before property taxes are due, and how delinquencies are handled. These reforms will help reduce foreclosures actions which are key to keeping and building public trust.

One witness representing the Government Accountability Ofice outlined the need for additional data collection from FHA, especially for foreclosure actions. This data could provide additional insight into how to further prevent foreclosures.

The good news is we have no major cutbacks in principal limit factors or changes in FHA insurance premium pricing. In addition, the outstanding HECM changes discussed in recent months are not guaranteed to be implemented. With that in mind, our best course of action is to continue reaching out to those who would benefit from a HECM being embued with the confidence that comes with Congress openly supporting the need for the program and acknowledging the impact of previous reforms.

The Comparison Trap

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Unhappy? You may be comparing yourself to others

Theodore Roosevelt famously said that comparison is the thief of joy. Often our dissatisfaction and unhappiness are rooted in comparing ourselves to others. 

You decide how the story ends

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What we can learn from Vice-Admiral James Stockdale

Admiral Stockdale said, “I never lost faith in the end of the story, I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade”.

Truth in Numbers

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ePath 100K RM leads

An honest assessment of HECM loan volumes & consumer demand

[Download transcript]

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…


Guard your heart

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Testing your inner narrator

Perhaps the strongest force on the planet lives between our ears- emotion. When it comes to our emotions we have two choices: learn to manage them or remove ourselves from the circumstances which trigger them. For most, the latter is not an option and truth be told one can only run so far from the things which stir negative feelings.

That said, consider for a moment that your emotions as a…