26 Oct

I have spent the past three days at the NRMLA conference in Boston, and though I will be sending a complete update to all my friends and broker partners, here is a quick recap of the highlights:
On Monday October 23, conference attendees learned that there is no more HUD grant money to pay for reverse mortgage counseling as of the first of this month, but there is a chance it may be reinstated, so we will keep an eye on that. 
The Financial Assessment that was given the nod, or rather, specifically “not prohibited” by HUD-s letter of October 5, was approved by NRMLA’s Board of Directors on Monday morning and members are being encouraged to follow guidelines with the goal being to reduce defaults on property charges.  Limited underwriting for property charges guidance includes a review of the applicants’ ability and willingness to pay property charges.
Other recent Federal legislative and regulatory changes were reviewed, all of which can be found at www.nrmlaonline.org
We heard a lot of statistics, unique in that they were all in one venue presented by a variety of experts.  Since October 1989, 725,000 HECM loans have been endorsed, 154,000 of which have been terminated, 559,000 are still active and 12,000 have been assigned to HUD.
There was extended and lively discussion of the tax and insurance defaults and suggestions on how to avoid this problem.  A large percentage of these delinquencies are for amounts less than $2000.00, and several policy responses were suggested, including set-asides or escrow-type payments.
Yesterday Jeff Birdsell presented a mathematical/graphical model charting the costs of a HECM against the costs of a conventional FHA loan or HELOC, demonstrating what those of us in the industry have intuited but can now demonstrate with numbers: a RM is not more expensive, especially over the long term.  In fact, if you were to make payments on a HECM as you would on a HELOC, at 19 years the HECM LOC would have reached the home value and would keep growing. 
We also got a sneak peek of the new consumer website at www.reversemortgage.org and the new “Borrow with Confidence” campaign.
Tuesday’s high point had to be the summit meeting with Carol Galante, Acting Assistant Secretary for Housing/Federal Housing Commissioner (awaiting Senate confirmation to drop the “Acting” from her title).  She is absolutely an advocate of the HECM program and touched on two issues of concern: one, funds have been requested in the 2012 budget for HECM counseling, and two, there are no plans in the immediate future to reduce HECM loan limits, for which she received a warm round of applause!
Today’s sessions concentrated on the perspective financial planners have now of RMs, and how RMs can be incorporated into a balanced retirement plan.  Some startling stats include the fact that more than 44% of workers in their 40s have NO pension plan with their employers.  From there, the discussion turned from the fact that home equity is most seniors’ greatest asset and the issue should not be whether or not to incorporate it into a retirement plan, but how.  All experts were in agreement that far more than the current 2% of market penetration could benefit from a RM.
A National Retirement Risk Index developed at Boston College measures 61% of working age households being AT RISK of being unable to maintain their standard of living in retirement, something which their illustrations show a RM being a remedy for.
MetLife Mature Market Institute surveyed 60-70 year olds, finding 59% had insufficient savings.  Surveys conducted in 1999 showed only 6% of 62-64 year olds and 17% of 65-70 year-olds interested in a RM, while in a 2010 survey those groups had gone up to 21% and 25% respectively, indicating that they may be ready to listen to reason!
Lastly, satisfaction surveys show that well over 80% of RM borrowers give highest marks, with 65% of their children approving of their parents’ decision.
I will be sending out full notes from this year’s NRMLA Annual Meeting and Expo when I get a chance to organize my notes.  Til then, take a moment to subscribe to this blog for updates.
Karen Keating,



  1. Brenda Miles October 26, 2011 at 8:38 pm #

    Now I feel as I wasted a lot of time in college. Looks like I chose the wrong field to major in


  2. Kim Sung October 26, 2011 at 9:00 pm #

    This is worth book marking. i’m going to send this to my co workers


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