Despite 2024 being a challenging year for sales volume, the reverse mortgage industry is still encouraged by the engagement of the Federal Housing Administration (FHA) on matters related to the Home Equity Conversion Mortgage (HECM) program, as well as attention to back-end loan issues from Ginnie Mae.
This feedback came from a panel discussion of industry leaders that took place at the National Reverse Mortgage Lenders Association (NRMLA) Annual Meeting and Expo in San Diego at the end of September.
Panel participants included Mike Kent, NRMLA board chair and reverse asset management and industry relations leader at Liberty Reverse/PHH Mortgage; Jim Cory, managing director of reverse at Guild Mortgage; and Longbridge Financial CEO Chris Mayer.
FHA collaboration
When asked by moderator and HousingWire Editor in Chief Sarah Wheeler about FHA’s collaboration with the reverse mortgage industry during a challenging time, each leader praised the engagement from their public sector partners.
“FHA has been such a great partner, especially starting in 2023 and continuing into 2024,” Kent said. “They did some amazing work around streamlining assignment submissions, particularly by improving the assignment submission package and allowing us to submit a little earlier. Once the packages were submitted, their quick turnaround time was remarkable.”
At Liberty/PHH, 70% to 75% of assignments are now processed and claims paid before needing to buy the loan out of the Ginnie Mae security, Kent said.
“What does this mean for us? It means liquidity,” he said. “I typically buy out $40 million to $50 million of loans each month, so if I can save $30 million to $40 million in cash that I don’t have to put out for buyouts, it’s very meaningful.
“FHA has done an incredible job and it was a great partnership. Commissioner (Julia) Gordon said they would get it done, and they did. It was really a fantastic collaboration.”
Mayer praised the engagement of both Gordon and Marcia Fudge, the former secretary of the U.S. Department of Housing and Urban Development (HUD), for having a focused concern on the impacts that any policy developments could have on older Americans.
“Recognizing the needs of this demographic and the importance of government in helping to serve them is something I constantly think about and appreciate,” Mayer said.
Impacts on origination
Mayer also observed that FHA and Ginnie Mae staff “have shown a real commitment to helping put the industry on stronger footing and thinking about the future.”
“We need two things — a stable base to operate from, and we need to remain relevant in the world,“ Mayer said. “I think we’re on the edge of losing relevance — or maybe we’ve already crossed that line. Recognizing this and taking steps to address it is crucial. Commissioner Gordon’s deep understanding of the program reflects a level of care and commitment that’s incredibly valuable to us.”
Cory added that he is very engaged in the origination side, so addressing back-end issues can make a real difference in keeping the machinery of originations well oiled, he explained.
“Thank you to the commissioner, her fantastic staff, and NRMLA leadership for working on these issues — things that many of you in this room, who are also focused on sales and origination, might not always see,” Cory said. “It’s a really big deal. But Chris is right, we can’t just focus on fixing the back-end problems. We need to expand and improve the overall distribution of the product.”
To accomplish that goal, Cory wants the reverse mortgage product to become more of a mainstream financial instrument so that it can reach more borrowers.
“The rising tide lifts all boats, and I think it’s crucial that we work to make this product accessible and widely accepted,” he said.