Another week, another host of reverse mortgage headlines, from a top regulator’s plea to spread warnings about a particular Home Equity Conversion Mortgage strategy to a major news outlet’s take on the future of the program after recent changes.
Use this handy cheat sheet of the most recent stories to spark up a conversation at the annual National Reverse Mortgage Lenders Association conference, slated to kick off Monday morning in San Francisco. The entire RMD team will be there — John Yedinak, Elizabeth Ecker, and Alex Spanko — so feel free to find us and let us know what you’re hearing and experiencing at this key time in the history of the program.
Cordray Seeks CFPB Board’s Help to Spread Reverse Mortgage Warnings — Consumer Financial Protection Bureau director Richard Cordray used a meeting of the bureau’s Consumer Advisory Board to spread a warning over the use of reverse mortgages to delay Social Security benefits. The CFPB released a report over the summer that concluded the costs outweigh the gains of holding out for bigger Social Security checks, an assertion that some in the financial planning community have criticized as inaccurate.
CNBC Tackles Reverse Mortgages in Post-October 2 World — Financial network CNBC took this deep dive into the reverse mortgage landscape after the Department of Housing and Urban Development instituted new rules regarding principal limit factors and mortgage insurance premiums, largely describing HECMs as still desirable — but acknowledging the downsides of slower credit line growth.
HECM Credit Line Growth Could Slow Substantially Under New Rules — Wade Pfau, American College of Financial Services professor and HECM advocate, released his latest calculations of reverse mortgage credit line growth under the new rules, showing that a hypothetical 62-year-old could see a substantial reduction in line availability by the time he or she reaches age 92.
Financial Assessment Continues to Reduce Reverse Mortgage Defaults — New View Advisors released the latest update to its analysis of pre- and post-Financial Assessment reverse mortgage loans, again concluding that the regulation has helped to curb tax-and-insurance defaults and foreclosures. In addition, the size of HECM loans continues to increase, buoyed by the overall stronger financial health of today’s borrowers.
Nationstar Reportedly Exploring Sale Prospects — Nationstar Mortgage Holdings, Inc. (NYSE: NSM) — parent of HECM servicer Champion Mortgage — has been the subject of persistent sale rumors recently, though CEO Jay Bray used the company’s earnings call to decline to comment on the talk. Written by Alex Spanko RMD