May 16, 2021

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Mortgage News

FHA Senior Housing Official Talks Reverse Mortgage Updates, Policy Priorities

While the U.S. Department of Housing and Urban Development (HUD) holds many key leadership roles that remain to be filled as the nation approaches the 100th day of the Joe Biden administration – including the critical roles of the Federal Housing Administration Commissioner ( FHA) and Deputy HUD Secretary – Currently, the FTA Senior Authority is part of the Office of Housing Deputy Chief Secretary (PDAS) and the FHA Lopa P. Kolluri.

Ms. Kolluri is a real estate expert with over 25 years of experience in affordable housing, community and economic development. She has held senior positions in the public and private sectors, both as a practitioner and as a policy maker at all levels.

She joined HUD for the second time in February 2021, under the direction of Secretary Marcia Fudge, and spoke to participants in the reverse mortgage industry at the National Reverse Mortgage Lenders Association (NRMLA) Virtual Policy Conference this week, after being led by Peter Bell, CEO of NRMLA, had been presented.

FHA and Reverse Mortgage Industry “Working Toward the Same Outcome”

PDAS Kolluri began her presentation with an introduction, indicating that while she is new to both the HUD Office of Housing and the reverse mortgage industry audience served by the trade association, she is new to members The reverse mortgage industry united in a common goal feels supportive of the elderly.

The official HUD portrait of Lopa P. Kolluri, Deputy Chief Secretary of the Housing Office and FHA SKIN | CC0
Lopa P. Kolluri, Assistant Principal Secretary for the Office of Housing and FTA

“My team speaks a lot about the cooperation and commitment between NRMLA and FHA and I am very much looking forward to continuing this positive and mutually beneficial working relationship,” began PDAS Kolluri. “Because in the end I think we’re trying to get the same result.”

In relation to these common goals, PDAS Kolluri listed three: To ensure that older Americans continue to “have the support and options they need to age in their own homes, if they choose”; Addressing the immediate needs of Home Equity Conversion Mortgage (HECM) borrowers affected by the COVID-19 coronavirus pandemic; and ensuring the operability and financial status of the HECM as a tool for American seniors, she said.

While Secretary Fudge has not yet made an explicit public statement on the HECM program during her tenure as HUD secretary, PDAS Kolluri quickly linked the political priorities of both the secretary and the president to the goals of the HECM program in her remarks.

“[Secretary Fudge] has made it clear that, under her leadership, HUD will focus on serving those who need us most: the homeless, the most vulnerable individuals and families and groups, and those who have been too often and too long from our housing system Nation underserved, ”said Kolluri. “Secretary Fudge also made it clear that we need to make sure our programs and policies are working and that they need to work to ensure that underserved groups achieve greater home equity. This includes those homeowners who would now have fewer options without staying in the home without the HECM program. It’s a cornerstone of why the HECM program exists. “

Importance of aging in place

The importance of aging in place, especially given the ongoing COVID-19 pandemic, is helping HUD and FHA illustrate the need for a viable and sustainable HECM program, PDAS Kolluri said.

“Aging in place has become even more important this past year as seniors try to protect themselves and their families from COVID-19,” she said. “We have a full-time team focus at HUD to ensure the millions struggling with COVID get the financial relief they need.”

One example she cited is the work that HUD is doing in partnership with the Treasury Department following the passage of the American Rescue Plan Act, as well as the additional allocations made to the department to act on its own responsibility. This includes easing the tax and insurance payments required for HECM borrowers as well as the repeated renewal of due and payable applications so that seniors affected by the pandemic cannot be excluded.

The work of the authors, increasing volume

PDAS Kolluri also commended reverse mortgage originators for continuing to work diligently amid the pandemic, especially as many in-contact processes have been mitigated or replaced with virtual and / or contactless options to limit the spread of the virus. This can be seen in the amount of HECM volume the department has processed since 2019, she explained.

“Through your work with the HECM program, together we continue to support homeowners non-stop, and this is reflected in the current HECM tape we are seeing,” she said. “Last February, the FHA insured over 4,000 HECMs from many of you listening today. As of February 28, we had active insurance for more than 432,000 HECMs and a maximum loss amount of $ 125 billion. “

After a visible decline in the 2019 fiscal year, PDAS Kolluri discussed how the volume began to rise again last year with a maximum receivable amount of over 16 billion US dollars at the end of the 2020 fiscal year Department data.

“Although I cannot make any predictions about where we will end up at the end of fiscal year 2021, the volume is currently slightly above the previous year’s figures,” she said. “By the end of February we have nearly 20,000 seniors through the [HECM] program [in the current] previous fiscal year. “

The need for further refinement

The reverse mortgage program and the industry around it are no stranger to change, and PDAS Kolluri pointed out that more changes are on the horizon but will require additional review once more leadership positions are filled in the department.

“I don’t think we can wait for the future,” she said. “The pandemic will eventually subside, and I believe we will derive a stronger model for the mortgage business from it, both in times of crisis and in times of prosperity. Part of preparing for the future means we need to refine the HECM program further to ensure its long-term sustainability. “

PDAS Kolluri reiterated Secretary Fudge’s commitment to serving historically underserved and disadvantaged populations and encouraged the performance of the HECM ledger in the Mutual Mortgage Insurance Fund Report for 2020 May Be Needed.

“[W]We know we need to do some work to meet the more immediate needs of both HECM creation and maintenance [systems], “She explained.” We need to consider the requirements for non-borrowing spouses so that they all offer the same level of protection when the borrower is gone. [We must] Better understand the challenges HECM service technicians face with due due diligence in verifying the date of death of a borrower. And we want to keep looking at the effects of not using [London Interbank Offered Rate (LIBOR)] Index on the old HECM variable rate mortgages in our public business. “

Learn more about PDAS Kolluri’s remarks on RMD in the coming days.