The U.S. Department of Housing and Urban Development (HUD) and Federal Housing Administration (FHA) are working on a vote with the White House and Treasury Department to determine how home equity conversion mortgages (HECMs) borrowers are affected by COVID -19 coronavirus pandemic can get help through the Homeowners Assistance Fund, a channel provided by the passing of the American Rescue Plan Act of 2021. This is according to the FHA’s Assistant Assistant Secretary (DAS) for Single Family Housing, Julienne Y. Joseph.
In his speech at the National Reverse Mortgage Lenders Association (NRMLA) summer virtual meeting earlier this month, DAS Joseph described how reverse mortgage borrowers may be able to access some of the allocated funds in the future, an intention already shared by Joe Biden government officials It was outlined shortly before to pass the comprehensive stimulus package designed to provide relief to Americans still grappling with the economic repercussions of the ongoing pandemic.
Seniors under the American Rescue Plan
The legislation contains $ 10 billion to create a homeowner assistance fund that will be distributed directly to states, tribal areas, and other areas to help people struggling with housing costs.This fund can be applied to some of the primary fees that the HECM- Borrowers have to pay as before detailed for RMD by an official from the Biden Administration.
The Treasury Department and the HUD view seniors as vulnerable homeowners whom the fund is designed to help, Joseph explained.
“HUD is actively involved in working with the Treasury Department to implement President Biden’s US $ 9.96 billion rescue plan […] to help the most vulnerable homeowners in our country, including our seniors, ”she said. “I am also very committed to providing as much help as possible under our authority, we are really trying to do that. [With] Given the bandwidth and capacity we have, we really want to make sure that we can help the borrowers who are really struggling right now. “
Part of the process of developing a more targeted response to seniors in general, and HECM borrowers in particular, has been information that the NRMLA itself has compiled about such situated homeowners and that the association has voluntarily provided to the relevant departments of the federal government, Joseph said . This will be one of the tools the HUD and FHA will use to develop a focused response and distribute that information accordingly.
“We are grateful for the voluntary information that the NRMLA has compiled on COVID,” said Joseph. “It has been invaluable to us and we will use this information to compile statistics that have been made available to the Treasury Department [Department]. And we in turn distribute them to the states. We hope states will use this information to better design programs to address the distressed HECM borrowers. This is our plan. “
Regarding the information that the Association has made available to the FHA, NRMLA President Steve Irwin described what was disclosed in an interview with RMD.
“NRMLA has coordinated and worked with a variety of consumer protection groups to limit pandemic defaults and provide relief through the Homeowners Assistance Fund program for HECM borrowers who may have defaulted,” said Irwin.
Advice for the reverse mortgage industry
When NRMLA President Steve Irwin DAS asked Joseph what the association, its membership, or the reverse mortgage industry can do to better facilitate collaboration between product prospects and the policy staff overseeing the HECM program, Joseph offered one Encouraging and pragmatic perspective on the collaboration opportunities she expects between the government and the reverse mortgage industry.
“Keep doing what you are doing because [reverse mortgage professionals] are the educational resource, ”she said. “As a political advocate, the information and perspective that you all offer are unlike any other type of creator. […] Their voices are extremely powerful. They all serve a demographic niche. There are people who rely on you. And while we, as policy makers, have a responsibility to do what we think is best for the industry, you […] have this practical practitioner’s perspective. “
Joseph, who herself once worked as a reverse mortgage originator, describes that she has an understanding of the perspectives industry participants can offer to those who make the policy that the industry must adhere to. From that perspective, it is helpful for the HUD and FHA to know how the creators and other stakeholders are honest with government policy towards the HECM program and whether or not it is effective, she explained.
“My suggestion to you is [continue] tell us what works and what doesn’t, ”she said. “That is the most effective [for us]. At the end of the day, we can have theories and suggestions, but when they are not workable or unsuccessful and [fail to] produce positive results, what use is the directive if it is not enforceable? “
Constructive feedback remains an efficient way for the FHA to engage with the reverse mortgage industry because only so much theories about a policy and its potential impact can offer the people who actually formulate those guidelines, Joseph said. A continuous dialogue is beneficial for both sides.
“Keep giving us constructive feedback that says, ‘You got it wrong, you got it right,'” she said. “’Don’t use an ax, use a scalpel. And those are the things that need to be adjusted to help the churches we want to serve. ‘ So that would be my suggestion. “
Citing some of her time with the Mortgage Bankers Association (MBA), Joseph stated that the voice of the actual creators should not be disregarded by those who create guidelines, she said.
“Even from my time at the MBA, I can only speak with the power of the author’s voices,” she said. “There is nothing more powerful, because here too you are the direct line to the consumer. So my suggestion to you would be to keep sharing and criticizing us. Telling us what we want to hear is not necessarily helpful. Keep giving us real life feedback to help us improve. “