The success of the working relationship between the Department of Housing and Urban Development and the members of the National Reverse Mortgage Lenders Association on improving the Home Equity Conversion Mortgage program is a prime example of the possibilities of public sector/private sector collaboration.
HUD has conceived changes to the HECM program that are a win-win for seniors and for the Federal Housing Administration--they both provide more security for senior borrowers and shore up the health of Mutual Mortgage Insurance Fund. Obtaining the legislative authority to make these needed changes was a joint effort of HUD and NRMLA.
A sense of excitement about this effort rang throughout at NRMLA’s 15th Annual Meeting & Expo in New Orleans last week where keynote speaker Assistant HUD Secretary/FHA Commissioner Carol Galante applauded NRMLA for its tireless effort working in concert with HUD/FHA to finalize the recent changes to the HECM loan program as authorized by the passage of The Reverse Mortgage Stabilization Act of 2013 with bipartisan support in both houses of Congress.
"NRMLA understood the challenges we were facing and stepped up to the plate,” Galante told the 565 attendees. "The FHA could not have done it (obtained passage of the Reverse Mortgage Stabilization Act of 2013) without you.”
The conference’s keynote speaker continued: "I am here to tell you, we are in this together. And when you see the problems seniors are having saving for retirement, it's easy to see why we invest the time and energy."
The first set of these changes resulting from the Act --including limitations on first-year draws, merging the HECM Saver and Standard into one product, PLF table adjustments and insurance rates varying according to draw—were implemented October 1. Additional changes including Financial Assessment will follow next year.
“FHA is committed to continuing to work side-by-side with NRMLA to implement the changes to the HECM loan program,” Galante said.
Representative Mike Fitzpatrick (R-PA) and Representative Denny Heck (D-WA), drafted the bipartisan Reverse Mortgage Stabilization Act which passed by unanimous consent in the House in June. With the leadership and guidance of Senator Robert Menendez (D-NJ), the bill passed through the Senate in late July, and was signed by the President in early August.
Peter Bell, CEO of NRMLA reiterated Galante’s message of cooperation, saying, “We appreciate HUD making sensible reforms to improve the HECM program and strengthen the insurance fund. Now it’s our job to utilize the changes to help qualified retirees plan for financial security with the help of a reverse mortgage.