NRMLA Panel Reveals Persistent Reverse Mortgage Misconceptions

Unscrupulous lenders, servicers snatching homes form confused family members, the dreaded “scam” word — all sorts of negative perceptions of the reverse mortgage industry were on display during a recent webinar for readers of a public-media website for older Americans.
Held as part of the National Reverse Mortgage Lenders Association’s Reverse Mortgage Education Week, the Tuesday webinar featured professionals fielding questions collected at Next Avenue, a PBS news service that covers baby-boomer issues. Chief among them: Aren’t reverse mortgages just a scam? How can I trust the industry?
The answers themselves probably weren’t anything folks in the reverse mortgage industry don’t already know by heart, but the questions revealed the obstacles that professionals face when attempting to pitch the products to consumers, even amid positive press coverage and a generally changing perception of the loans in the wider media landscape.
Perhaps humor could be a way to go. Phil Stevenson, the owner of PS Financial Services in Miami, said he likes to tell his prospects that, yes, they might one day have to be forced out of their homes.
“We can kick you out of the home when you turn 150 years old,” Stevenson said, referencing the fact that Home Equity Conversion Mortgages are usually scheduled to officially mature on the youngest borrower’s 150th birthday.
“We know none of us will reach 150, at least at this point in history, so you can live there for the rest of your life,” Stevenson said.
He used the humor to pivot into a more serious discussion of tax-and-insurance defaults, noting that these situations represent the overwhelming majority of actual reverse mortgage-related foreclosures and evictions.
NRMLA CEO Peter Bell echoed that sentiment in a discussion of the ways the industry’s safety and reputation have improved in recent years, including the institution of the Financial Assessment rules and increased oversight from the Consumer Financial Protection Bureau.
“The majority of scams are with people who deal with the senior after they have the money, oftentimes members of their own families,” Bell said. “It’s important for people to be wary [of people] that come to sell them different products, whether it’s home improvements, or family members that are urging them to get the reverse mortgage in order to give them assistance. I think you have to be as wary of that as you do of selecting a lender.”
The panel discussion also included a detailed breakdown of the loan repayment process, primarily in response to a question from a reader about the presumably short timeframe that heirs have to make a decision. Tera Guy, a vice president at servicer James B. Nutter & Company, walked through the timeline for the viewers, and emphasized the importance of keeping contact information up-to-date to ensure that heirs have as much time as possible to debate their options.
Lance Canada, a reverse mortgage specialist at First Bank in Raleigh, N.C., touted the need for strong counseling, coupled with input from a family and other trusted advisors.
“This is all laid out, it’s in writing, it’s law, and it’s there,” Canada said, noting that a good counseling program is designed to educate, not persuade, the consumer.
“And sometimes the decision is no, I don’t need it,” Canada said.
View the full playback of the webinar here.
Written by Alex Spanko

RMD Jobs: Your Source for the Best Reverse Mortgage Talent

Loyal RMD readers know that the appearance of the weekly jobs post means two things: the weekend’s almost here, and your next great employee — or job — could be just a click away.
This week, new jobs from coast to coast join unfilled positions from weeks past. Take a look at this list to see who’s hiring, and don’t forget to check all week long for the latest posts.

Reverse Mortgage Processor — Great Florida Lending, Inc.
TPO Channel Account Executive — Longbridge Financial, LLC
Inside sales – Loan Officer Trainee — American Advisors Group
Loan Officer – Inside Sales — American Advisors Group
Lender Support Specialist — American Advisors Group
REVERSE MORTGAGE ORIGINATOR — Fairway Independent Mortgage Corp.
Reverse Mortgage Loan Processor — HighTechLending dba AmericanSenior
Reverse Mortgage DE Underwriter — HighTechLending dba AmericanSenior
Inside Reverse Mortgage Loan Officer — HighTechLending dba AmericanSenior
California Reverse Mortgage Originators — Senior Funding Associates
Producing Manager/Producing Loan Officers — Professional Mortgage Alliance, LLC
Reverse Mortgage Loan Officer — Live Well Financial

More than 7,000 of the best and the brightest in the reverse mortgage industry read RMD each day. Want them to join your team? Post your jobs to the Reverse Mortgage Daily Job Board today!

Patch Homes Rolls Out New Home Equity Financing Product

With home equity sharing products beginning to make a comeback following the housing crisis and recovery, one California startup is now exiting its private beta phase and offering a home equity financing platform that allows existing homeowners to share their future home price appreciation in exchange for upfront cash. 
Patch Homes, led by co-founders Sahil Gupta and Sundeep Ambati, provides its equity-share product at 0% interest with no monthly payments, in exchange for the future appreciation, or depreciation, of the home. The company holds a lien on the property once the contract with the homeowner is signed, and underwrites each agreement on a case-by-case basis, meaning homeowners can access different amounts of equity in the form of cash depending on their needs, financial profile, and level of equity. Homeowners with existing mortgages are eligible, depending on the amount of equity they hold and as long as the loan-to-value ratio on the property does not exceed 80%. Homeowners must have a credit score of at least 620 to qualify. 
“Generally what we have found is people will access around 10% to 15% of the value of the house in the form of equity,” Gupta tells RMD. “We want homeowners to have another option when looking at home equity.”
The company has worked with homeowners of all ages in its beta stage, with home types ranging from condos to single family homes and investment properties. The founders say they’re expanding financing options beyond what may be available through traditional lenders such as banks.
Upfront costs are similar to traditional home loans, including title and escrow services, with a 3% fee based on the amount of equity that will be accessed. Contracts are written in 10-year terms, with the ability for the homeowner to exit the contract prior to that term under certain circumstances, or to transfer the property in the case of a homeowner passing away. 
Like other recent equity-share products, Patch may not compete directly with reverse mortgages in that its terms and benefits vary from the traditional Home Equity Conversion Mortgage, but its executives say the product could serve as a bridge for homeowners who may not yet qualify for a reverse mortgage. 
“We get a number of clients that may not be eligible for a reverse mortgage yet; they are in their late 40s or 50s and may not be sure if a reverse mortgage is right for them, but they are in a position where they are slowing down or want to retire,” Ambati says. “A lot of times Patch Homes ends up being a bridge or another solution to access their equity in the meantime.”
Patch Homes has recently secured $1 million in seed funding, and counts among its investors Techstars Ventures, KIMA Ventures, Eric DiBenedetto, and Airbnb co-founder Nathan Blecharczyk. Currently the product is available in California and will be rolled out in other regions as the platform grows.
Written by Elizabeth Ecker

Another Day, Another Ocwen Motion: This Time, It’s Constitutional

Ocwen Financial Corporation (NYSE: OCN) opened a second line of attack against its regulatory enemies Wednesday morning, filing motions that request an early decision in a court case that could potentially declare the Consumer Financial Protection Bureau unconstitutional — and, in turn, invalidate a federal lawsuit that the CFPB filed against Ocwen last week.
After submitting motions for restraining orders against state-level cease-and-desist orders in Massachusetts and Illinois yesterday, the West Palm Beach, Fla.-based firm set its sights on the federal government today, seeking an early ruling in the case of PHH Corp. v. Consumer Financial Protection Bureau. Back in October, three judges on the D.C. Circuit Court of Appeals ruled that the CFPB — an independent federal bureau created in the wake of the financial criss and recession in 2010 — had an unconstitutional structure, citing the president’s inability to fire its director, as well as the general unchecked power of the position.
Many Republicans have called for the ouster of current CFPB director Richard Cordray, but despite controlling the White House, their hands are tied: As the Boston Globe pointed out, the director — and ally of progressive Massachusetts Sen. Elizabeth Warren, who helped form the CFPB — can’t be removed until his term elapses in 2018 unless President Trump can illustrate that Cordray exhibited “inefficiency, neglect of duty, or malfeasance” in office.
According to the National Law Review, the D.C. Circuit is set to rehear the PHH v. CFPB case on May 24, but an early ruling could pay serious dividends for Ocwen. The beleaguered company faces a federal lawsuit in which the CFPB alleges rampant problems in its mortgage servicing operations, including the improper handling of escrow accounts, illegal foreclosures, and shoddy record-keeping. Were the court to uphold its previous ruling, Ocwen says, the case should rightfully be thrown out.
“Ocwen seeks to get this issue resolved early, because it should be relieved of having to defend this unfair action from an unconstitutional agency,” an Ocwen release announcing the actions reads. 
Ocwen contends that the CFPB’s suit illustrates the constitutional issues at play, claiming that the bureau included a raft of old allegations that the servicer had already addressed, and also failed to carefully review the servicing files at the heart of its claims.
The servicing giant promised further action against the remaining states that filed cease-and-desist orders in the coming weeks. Ocwen services and originates reverse mortgages through its Liberty Home Equity Solutions entity; so far, based on contacts with the state departments of banking involved in the actions and a partial review of the motions, only Illinois specifically mentioned Liberty, halting the firm’s ability to originate reverse mortgages or acquire new reverse mortgage servicing rights in the state. RMD will update this information as it becomes available.
Ocwen’s stock, which had taken a precipitous tumble in the wake of the actions last week, crept up slightly on the news, landing on Seeking Alpha’s list of top premarket gainers; at 9:05 a.m. Eastern, OCN was up 6%.  
Written by Alex Spanko

Ocwen, Barred from Reverse Mortgage Originations in IL, Strikes Back

Faced with a wave of enforcement actions from 21 states, the District of Columbia, and the federal government last week, nationwide mortgage servicer Ocwen Financial Corporation on Tuesday struck back, filing motions for emergency restraining orders against actions taken by the states of Illinois and Massachusetts.
Massachusetts levied perhaps the strictest penalties on the West Palm Beach, Fla.-based Ocwen: Like the majority of the other 22 state actions filed last Friday, the Massachusetts action temporarily suspends the company’s ability to originate loans and acquire new mortgage servicing rights in the Bay State. But unlike the other orders — including those from Illinois, North Carolina, and Wisconsin — the Massachusetts Division of Banks took the additional step of requiring Ocwen to relinquish existing mortgage servicing rights within the state.
“The Order requires Ocwen to develop and implement a plan to transfer its loan servicing activities for Massachusetts consumer mortgage loans to a Division-approved licensed loan servicer(s),” the text of the order reads. “The Order also requires Ocwen to either fund or place mortgage loan applications in process with other lenders at no loss to applicants, and to cease accepting new applications.”
Reverse Implications Unclear
The effect on Ocwen’s reverse mortgage origination and servicing arm, Liberty Home Equity Solutions, remains cloudy. Illinois’ order, for instance, specifically mentions Liberty by name, along with Ocwen Loan Servicing and Homeward Residential, Inc., a subsidiary that both services and originates “forward” mortgages. As a result, all three entities are prevented from originating new loans or acquiring servicing rights until they provide detailed financial reports, including all liabilities, and a full reconciliation of escrow accounts.
The Massachusetts order, meanwhile, only mentions Ocwen Loan Servicing, LLC. Chris Goetcheus, director of communications at the state’s Office of Consumer Affairs and Business Regulation, confirmed in e-mail to RMD that the state’s cease-and-desist does not apply to Liberty.
As of April 20, Ocwen’s servicing portfolio in Massachusetts consists of 34,472 loans, according to the state, or 3.5% of the company’s total slate.
Ocwen’s motions focus on the potential hardships that these actions would cause to consumers, noting that the freeze on its operations could potentially harm consumers that have pending applications or who wish to modify their existing Ocwen loans.
“Under these circumstances, Ocwen has a responsibility to its customers, shareholders, and employees to vigorously defend the company,” the company said in a press release issued Tuesday.
Multiple requests for further comment from Liberty’s internal marketing department, as well as a third-party spokesman for Ocwen, were not returned as of press time.
Multi-State Investigation Led to Actions
The release also claims that the issues raised by Massachusetts and Illinois are outdated, stemming from a multi-state investigation into Ocwen’s operations from January 2013 to February 2015.
That inquiry from the Multi-State Mortgage Committee — consisting of investigators from Florida, Maryland, Massachusetts, Mississippi, Montana, and Washington — directly led to Ocwen’s very bad April 20. The committee found that Ocwen mishandled escrow payments, improperly withholding funds from some borrowers and failing to make timely tax and insurance payments on behalf of consumers. In addition, the committee alleged that the company violated the terms of a 2016 memorandum of understanding when it submitted financial projections that did not include its liabilities — which, the North Carolina Commissioner of Banks claimed, would have revealed that “Ocwen continuing as a going concern would be in doubt.”
The Conference of State Bank Supervisors cited the escrow-related revelations when announcing that 21 states and D.C. had taken restrictive actions against Ocwen, the majority of which will prevent the company from acquiring new mortgage servicing rights until management can prove it has its escrow house in order.
In a completely separate action last Friday, the Consumer Financial Protection Bureau filed a federal lawsuit against Ocwen over a host of alleged violations, including the escrow issues, improper foreclosures, and systemic problems with its in-house servicing software — which, according to the CFPB, Ocwen’s head of servicing deemed “ridiculous” and a “train wreck” back in 2014.
Ocwen’s release promised further appeals or responses to each of the orders “in the coming days.”
“In the meantime, Ocwen remains committed to working with Illinois, Massachusetts, and the other state regulators to resolve any valid concerns,” the release said.
According to an exhaustive breakdown of each state’s actions against Ocwen over at HousingWire, Montana and South Dakota officials additionally ordered the suspension of all Ocwen-related foreclosures in their states, while the vast majority of remaining states simply enacted temporary suspensions of originations and the acquisition of mortgage servicing rights. HousingWire’s compilation found that only Illinois mentioned Liberty Home Equity Solutions in its release announcing the actions.
Written by Alex Spanko

What Reverse Mortgage Professionals Could Expect During a Shutdown

Move over, death and taxes: It’s probably time to add “threat of a government shutdown” to Benjamin Franklin’s list of absolute certainties in life.
Long considered a last-ditch nuclear option, the threat of government shutdown has loomed large in this era of intense partisanship, with both Democrats and Republicans using the specter of lost services — and missed government-employee paychecks — to advance their causes.
This time around, Congress and the Trump administration have until midnight on Friday to avert a second shutdown in four years by passing a stopgap spending bill that President Trump must sign. The White House raised fears that a government closure was imminent late last week, when budget director Mick Mulvaney implied that funding for Affordable Care Act insurance subsidies and other initiatives favored by Democrats was contingent on dollars for a controversial U.S.-Mexico border wall, one of President Trump’s biggest campaign-trail promises. Democrats have indicated that they will oppose any spending bill that includes funding for the wall, which has also faced resistance from some Republicans.
And while indications from Washington have turned positive in recent days — with President Trump reportedly backing down from Mulvaney’s tough talk on the wall in a meeting with right-leaning media outlets — even the threat of a shutdown could have an impact on how reverse mortgage brokers and originators do business.
That’s because unlike pretty much all other Federal Housing Administration loan activity, Home Equity Conversion Mortgage endorsements would come to a complete halt if the government were to shut down. According to an FHA resource compiled during the last federal government stoppage back in 2013, the FHA can continue to endorse single-family loans, with the caveat that the process may take longer with substantially reduced staffing levels.
But the HECM program falls by the wayside due to legal restrictions.
“FHA does not have the authority to insure additional HECMs during this period due to the statutory cap limiting the number of HECMs under the HECM program,” a separate Department of Housing and Urban Development piece from the last shutdown noted.
As RMD reported at the time, the 16-day cessation of non-essential government services led to a backlog in reverse mortgage endorsements that officials said would take up to two months to resolve.
Just because “forward” FHA lending would continue under a shutdown, experts caution that there could still be headaches in store for borrowers. While a federal government work halt wouldn’t affect such vital services as the U.S. Postal Service and the Transportation Security Agency, countless federal employees who help the wheels of government turn would be barred reporting to work and even accessing their departments’ computer networks from home, CNBC points out. This could mean trouble for loan applicants If, for instance, Social Security Administration employees aren’t available to verify Social Security numbers for identification purposes.
“That’s often required if something in an application doesn’t match the information associated with a Social Security number in a credit report or other database, even if it’s just a typo,” the CNBC report notes. “If the lender tries to verify the number with the Social Security Administration, and no one at the agency answers the phone, that borrower could be out of luck.”
About 17% of home closings were delayed during the previous shutdown, according to the CNBC report, with scattered reports of deals that were called off entirely due to the roadblocks.
Written by Alex Spanko

Two Vital Reverse Mortgage Tax Resources

The unusually late tax day of April 18 may have come and gone, but reverse mortgage professionals know that questions about the tax implications of Home Equity Conversion Mortgages don’t have a deadline. In the days leading up to the federal tax deadline, two prominent financial planning writers featured pieces that can help explain these issues to potential borrowers year round.
Over at Nerd’s Eye View, writer Michael Kitces goes long on the ways that reverse mortgage proceeds can and can’t get a borrower into murky tax waters. The short answer is they generally cannot: Because proceeds from a reverse mortgage are simply a loan, Uncle Sam can’t and won’t levy taxes on HECM checks.
“No income or wealth is created in the first place; the borrower is simply taking out a personal loan and using his/her primary residence as the collateral, which isn’t any more taxable than getting a loan to buy a car or pay for college, or taking out a home equity line of credit or borrowing against a life insurance policy,” Kitces writes.
Tax Deductions Become Interest-ing
Things become slightly more difficult, however, when the question of reverse mortgage interest comes up. That’s because the tax code doesn’t care what type of loan you have when it comes to deducting interest, but only the reason that you’re using the loan. The key distinction, as both Kitces and personal-finance blogger Tom Davison write, is between “acquisition indebtedness” and “home equity indebtedness.”
Before your eyes glaze over, keep in mind that this subtle wordplay can mean the difference between a deduction of $100,000 and $1 million. Put simply, you can deduct interest on up to the first million bucks of “acquisition indebtedness,” or any money borrowed against a home that you then use to buy, build, or “substantially improve” a first or second property. But if you simply take out a loan to spend the proceeds on other things, such as home health care or day-to-day expenses, suddenly you’re in regular “home equity debt,” and you can only deduct the interest on the first $100,000.
Clearly there are many more factors at play, and RMD doesn’t purport itself to be an exhaustive tax-law resource — for instance, you can’t claim home equity indebtedness deductions if you pay the alternative minimum tax — but a high-level understanding of HECM tax implications is important, as many originators and brokers cite taxes as a major source of questions that they field from prospective and current borrowers.
Using Reverse Mortgage Payments to Your Advantage
The fact that borrowers don’t have to make any payments is often highlighted as one of the key benefits of reverse mortgage products for older Americans. But in a frequently updated post on his blog,, Davison posits that making interest payments in certain years could have tax benefits: For instance, if a borrower is required to take a required minimum distribution from a retirement account, he or she could suddenly end up in a higher tax bracket for a given year. A payment toward the reverse mortgage principal could result in a deduction that helps counteract the effects of the higher bracket, Davison writes.
Kitces takes the discussion a step further on his blog, noting that borrowers — or their heirs — can claim a substantial interest deduction in the year that they pay off the reverse mortgage in its entirety, either through the sale of the house or some other means. In some cases, Kitces writes, it then might actually be the borrower or heir’s interest to create income to take full advantage of the sizable deduction, either through taking money out of an IRA or a partial Roth conversion.
Read the Full Posts for More
Both Kitces and Davison’s pieces are must-reads for anyone who works with current or curious borrowers, and for their full looks into the potentially confusing world of reverse mortgage tax deductions, visit Nerd’s Eye View and Tools for Retirement Planning.
Written by Alex Spanko

CNBC: Reverse Mortgages Aren’t for the “Stupid”

Continuing its recent string of positive reporting on reverse mortgages, CNBC posted an article summarizing the new thinking behind Home Equity Conversion Mortgages last week — with the added caveat that the products aren’t just for the “stupid” anymore.
“You don’t have to be old, poor, and stupid to get a reverse mortgage,” the piece by CNBC reporter Andrew Osterland begins, before summarizing the reasons why the products earned such a reputation in the first place: cheesy television ads, unscrupulous brokers, and unwise borrower behavior.
“‘Free money’ has a tendency to encourage bad behavior — one reason the Federal Housing Administration requires borrowers to undergo a counseling session before entering a reverse mortgage contract,” Osterland writes. “In other words, don’t use a lump-sum payment from one of these to buy the Mercedes-Benz you’ve always wanted.”
Osterland also includes a telling quote from a financial planner, who otherwise supports the use of Home Equity Conversion Mortgages as a responsible part of a larger retirement plan.
“The late-night ads are a really bad idea for the industry,” planner and Texas Tech University professor John Salter told CNBC.
Riffs on the industry’s marketing strategies aside, the CNBC piece provides a detailed and unbiased look on the ways seniors can use reverse mortgages, including a handy pro-and-con list for those with shorter attention spans. Among the pros: the “non-recourse” feature of the loan, in which the terms can’t be changed and heirs can’t be on the hook for more money than the home is worth, protection against bearish markets, and the growth feature of the HECM line of credit.
The cons, meanwhile, represent a rational list of factors that older borrowers should consider, such as the continued payment of taxes and insurance, as well as potentially high closing costs. Osterland also cautions curious seniors to consult with multiple brokers and lenders before signing the dotted line to ensure that they get the best deal.
This report comes just a week after a separate CNBC article in which a financial planner said his colleagues would be “remiss” if they didn’t cover HECMs when discussing retirement options with seniors. As many in the reverse mortgage industry have noticed over the past few years, media coverage of the products have grown increasingly positive, with the financial-planning angle gaining significant traction.
The CNBC piece features a quote from Wade Pfau, a professor at the American College of Financial Planning and a frequent HECM cheerleader in the popular media.
“They are the one retirement tool that benefits from low interest rates,” Pfau told CNBC. “Not only is the initial principal limit higher but, if borrowers choose to set up a line of credit, the line grows throughout the life of the contract.”
Read the full piece at CNBC here.
Written by Alex Spanko

Reverse Mortgage Complaints Spike, But CFPB Database’s Future in Doubt

The numbers coming out of the Consumer Financial Protection Bureau were striking: Disputes over reverse mortgages spiked by 172% from 2012, the first full year that the CFPB opened its virtual doors to such complaints, to 2016. Over that same period, the CFPB saw a 102% increase in all Federal Housing Administration-related loans, while Americans aged 62 and older represent a disproportionally high amount of overall CFPB mortgage complaints.
But the story is slightly more complicated than the data depicts without context. According to Reid Herlihy, a partner at the Washington, D.C. law firm of Ballard Spahr, the rise in mortgage-related complaints has more to do with general awareness of the CFPB’s role and reporting functions, and not necessarily with a decline in mortgage-servicing quality over the five years for which data was available.
“I would put that to the general awareness of the CFPB,” Herlihy told RMD of the rise in complaints over time. 
Herlihy pointed out that after a substantial spike between 2011 and 2012 — entirely due to the fact that the agency only began accepting complaints in December 2011 — the overall number of gripes has remained relatively stable between 38,000 to 42,000 per year, with a jump to 49,408 in 2013 representing the only outlier. He also posited that any significant gains in categorical complaints were the result of the CFPB gradually expanding the product classes for which it accepts consumer disputes.
Still, the data does illustrate some interesting issues relevant to the Home Equity Conversion Mortgage space. As the real-estate data firm Trulia noted on its blog this week, borrowers aged 62 and older account for an “outsized” share of all complaints, claiming just about 10% of the total. 
“That’s a high rate given that just 35% of seniors who own a home have a mortgage,” the Trulia blog points out.
Reverse mortgage complaints have also steadily increased since the initial full-year total of 206 in 2012, hitting 562 last year. Through April 10 of this year, consumers have lodged a total of 138 issues with the CFPB — on pace for a total of about 504 in 2017. Between 2012 and 2016, disputes over VA mortgages rose from 495 to 1,421, while all FHA-related mortgage complaints climbed from 2,707 to 5,478.
“High dispute rates for these types of loans aren’t surprising,” the Trulia blog notes. “VA and FHA loans and reverse mortgages are most often [taken out by]  at-risk [people who] could benefit from an intermediary: veterans, low-income and older borrowers.”
“These loans are also specialized products that many lenders and servicers don’t have the expertise to handle, according to Erin Lantz, Trulla’s Vice President for mortgages,” the post continues.
This data analysis came in the same week that the CFPB’s very existence, in its current form at least, faces one of its most serious threats. Under new legislation formally unveiled last week by House Financial Services Committee Rep. Jeb Hensarling, a Texas Republican, the CFPB’s power would be largely stripped as part of the GOP’s overhaul of the Dodd-Frank financial reform laws. Should the so-called Financial CHOICE Act pass, the CFPB would be rebranded as the “Consumer Law Enforcement Agency” and fall under stricter Congressional oversight; currently, the CFPB operates as an independent agency. 
The new agency would also exist only to enforce consumer financial laws already on the books, and the consumer complaint database would disappear entirely, according to a summary of the law posted by HousingWire.
The brainchild of now-Sen. Elizabeth Warren, Democrat of Massachusetts, the CFPB has been hailed by the left as an important safeguard of consumers’ rights against the big banks and other financial institutions, and derided from the right as an unfair government albatross around the neck of innovation and the free marketplace.
The database itself has been a particular sticking point for the financial industry, with critics claiming that it legitimizes unverified complaints by placing the name of a government agency on a list of gripes that institutions have yet to investigate.
For instance, back in 2015, the Mortgage Bankers Association released a scathing letter to the CFPB asking for key reforms in the way it collects and reports complaint data.
“In MBA’s view, because more than 80 percent of complaints do not require action behind an explanation, posting these unsubstantiated complaint narratives will only mislead the consumers the CFPB is charged with protecting,” the letter said.
“It is not clear that posting substantiated complaints is an effective use of the CFPB’s time or resources,” the association continued, noting that consumers can easily turn to user-generated reviews and complaints on sites such as Yelp, Angie’s List, and Twitter.
Under Hensarling, the House Financial Services Committee has been openly hostile to the CFPB and its authority, frequently deeming it “unconstitutional” and calling for the ouster of its director, Richard Cordray. 
However, like many of the plans unveiled by the GOP and the Trump administration, it’s important to note that Hensarling’s bill remains simply that — a plan. As Reuters points out, any large-scale overhaul of Dodd-Frank would require passage of both houses, and in order to clear the Senate, such legislation would need the backing of at least eight Democrats.
“Instead, the Senate is expected to take a slower, piecemeal approach to revisiting financial rules, with a focus on changes that could garner bipartisan support,” Reuters noted.
As RMD reported back in early March, financial industry watchers seem to think that substantially rolling back laws and regulations ostensibly designed to help average consumers might be too politically harmful for more middle-of-the-road politicians.
“The experience of the subprime mortgage crisis is still fresh in everybody’s mind, and the Great Recession is still fresh in everybody’s mind,” attorney Christopher Willis, who leads the Ballard Spahr firm’s Consumer Financial Services Litigation Group, told RMD at the time. “And I don’t think that the Republicans can safely do away with the agency given the perceived value it has to the electorate.”
Written by Alex Spanko

ReverseVision Takes Reverse Mortgage Training Program Live

After a successful test run last month, ReverseVision plans to expand in-person reverse mortgage training courses at its San Diego headquarters.
The Home Equity Conversion Mortgage software and technology firm has hosted its online “RV University” program for the last three years, but decided to enter the world of in-real-life training in March with a course for 11 students. Starting in May, Reverse Vision will host the three-day event once per month, with scheduled events for May 2 through May 4, and June 6 through June 8.
The format mirrors that of the online version, with a day each for covering regulatory guidelines, origination scenarios, and compliance and sales strategies for pitching the loans to a variety of borrower types or potential referral sources.
In a statement, ReverseVision’s vice president of sales and marketing Wendy Peel pointed to the implementation of rule changes over the past few years as a key reason why players in the space should consider education courses.
“Key regulatory changes have evolved the HECM significantly, which is why both new and experienced reverse mortgage professionals stand to benefit from hands-on training that addresses product knowledge,” Peel said in the statement.
“Normalizing this product so that more traditional lenders see HECMs as a natural addition to their product offerings will be key to our industry’s continued growth and success,” Peel said.
The courses cost $995 apiece, as compared to about $50 for the firm’s “Reverse Mortgage Essentials” course offered at all times online.
The first round of the course in March featured both reverse mortgage brokers seeking a refresher on regulatory issues and other information pertinent to the HECM program, as well as forward-mortgage professionals looking to learn more about the product; ReverseVision is positioning the courses as a way to help home-loan originators and brokers generally expand their businesses.
“Reverse mortgages will be trending for some time thanks to rising interest rates and the size of the Baby Boomer generation,” said March attendee Christina Harmes, assistant manager of the reverse mortgage division at C2 Financial, a San Diego-based lender, in the statement.  “There’s a real need for comprehensive training to help forward loan officers learn how to originate reverse mortgages.”
Written by Alex Spanko