At a time when consensus is hard to find in Washington, members of Congress, advocates for senior citizens, and representatives of financial services companies all agreed that reverse mortgages are an important tool in providing a better life for seniors, during a hearing conducted by the House Financial Services Committee’s Subcommittee on Insurance, Housing and Community Opportunity titled, "“Oversight of the Federal Housing Administration’s Reverse Mortgage Program for Seniors."
“HECM [The Home Equity Conversion Mortgage program] has been a useful tool, helping hundreds of thousands of seniors maintain their homes and lead more financially stable lives,” said Peter Bell, president of the National Reverse Mortgage Lenders Association (NRMLA) in his testimony. “The program has been administered thoughtfully, carefully and responsibly by a partnership of stakeholders. This has allowed the reverse mortgage concept to gain a foothold and prove the value of this important personal financial management tool as a component of retirement finance and funding longevity.”
Joining Bell is testifying before the hearing was:
►Charles Coulter, Deputy Assistant Secretary for Single Family Programs, Office of Housing, Federal Housing Administration (FHA)
►Daniel Fenton, Housing Director, Money Management International
►Jeffrey M. Lewis, Chief Executive Officer and Chairman, Generation Mortgage Company
►Dr. Anthony Sanders, Distinguished Professor of Real Estate Finance, Senior Scholar, Mercatus Center at George Mason University
►Houman Shadab, Associate Professor of Law, New York Law School
►Dr. Barbara R. Stucki, Vice President, Home Equity Initiatives, National Council on Aging
►Dr. Lori A. Trawinski, Senior Strategic Policy Advisor, Consumer and State Affairs Team, AARP Public Policy Institute
“The HECM is an example of the best kind of government program,” said Lewis. “A program that utilizes the reach and financial heft of the government to leverage private sector involvement, pays for itself, is run largely by the private sector and provides a life-transforming financial product to consumers.”
Additionally, each member of Congress who spoke at the hearing began his or her statement by recognizing the value of reverse mortgages to senior citizens. Together, the industry participants seemed to share a sense of pride about the success of the program—780,00 loans, to date—and the frequent readjustments that have been made over the program’s 20-year history to improve it and protect if financially. However, changes can be made to improve the program and make this resource more accessible for a greater number of seniors. Almost every speaker referenced the need to adjust the limit on the number of HECM loans the FHA is authorized to insure.
“Although the cap has been routinely raised or suspended, its existence deters some industry participants,” Bell said during his testimony. “NRMLA urges this Subcommittee to support permanently removing the authorization cap to minimize any possible disruption of HECM.”