Executive Orders: The Impact on Our Industry

ePath reverse mortgage leads

A Pause for HECM Changes?

pres-penExecutive orders. This practice of exercising executive authority has become increasingly frequent and controversial in recent presidential administrations. In 2013 HUD was granted the authority to in effect, issue ‘executive orders’ under FHA’s expanded powers. President Trump has promised to cut federal regulations dramatically. Will the administration’s executive orders curb the rule-making authority of FHA?

The HECM Stabilization Act of 2013 granted FHA the Congressional authority to enact reforms to the Home Equity Conversion Mortgage program as needed to ensure the program’s longevity.

The Trump administration’s recent executive order mandates that all agencies to keep additional regulatory costs at zero, unless required by law. Under a regulation-cutting administration HUD may find itself hamstrung in enacting their recent set of HECM rules which were due to be enacted on September 19th this year. These additional rules included the authority to reduce first year distributions from 50%, a 95% property acquisition threshold, and an 11% cap on closing costs for purchase transactions.

Reverse mortgage lenders may soon get a…

Download the video transcript here.

The Trump Administration & Reverse Mortgages

ePath reverse mortgage leads

How will the Trump administration approach reverse mortgages?

reverse mortgage newsDoes one of the first decisions made by the Trump administration foreshadow the future of the reverse mortgage program? The administration’s decision to rescind a recent FHA mortgage insurance premium reduction was swift- within one hour after President Donald Trump took the oath of office. How will a business-minded administration approach the Home Equity Conversion Mortgage program?

Mortgage lenders should brace themselves for change. The Trump administration team made it clear they intend to dismantle the Dodd-Frank Act, a complex set of banking and lending regulations that have been criticized for their complexity and hurdles for middle class borrowers in obtaining credit. In addition the Consumer Financial Protection Bureau faces a substantial makeover. While both parties agree that consumer protections are needed, they disagree as to how that goal should be achieved.

Does this mean the Trump administration will be anti-reverse mortgage? By no means. However the ambition to reduce spending and waste should deliberate on the unintended consequences inherent in policy changes, specifically for today’s aging homeowners. With most retirees having less than $50,000 in savings the need to finance one’s longevity using their home has never been greater. Housing has become the lynchpin upon which the majority of American’s wealth is built.

Download the video transcript here.