As signs of improvement and recovery from the worst COVID-19 coronavirus pandemic in the United States become increasingly prominent, federal politicians in Washington, DC, are being consumed by a series of legislative proposals to strengthen the post-pandemic recovery period, along with competing ideas between the Democratic and Republican sides of the aisle in Congress.
Furthermore, a surprise twist in events in November effectively brought the House, Senate and White House under Democratic control and changed parts of the legislative equation regarding the scope and scope of the proposed programs, which in turn could mean important legislative issues related With the reverse mortgage program you could fall by the wayside.
This emerges from a panel discussion in Congress on Legislative Priorities in 2021, held recently at the National Reverse Mortgage Lenders Association (NRMLA) Virtual Policy Conference.
How the dynamic has changed
At the NRMLA annual virtual meeting a few weeks after the late 2020 general election, Scott Olson of Olson Advocacy in Arlington, Virginia – a lobbyist who works for NRMLA – described How Democrats “rose” when it came to winning two prominent Senate seats in Georgia in a special election scheduled for January 2021. Olson was perfectly able to rate the race that way, as Georgia hadn’t been a Democratic Senator since 2005, when Senator Zell Miller – himself in the first place supported republicans at the end of his career – withdrew from his seat.
The special elections were different, however, as both Democrats – Rev. Raphael Warnock and Jon Ossoff – defeated the Republicans officiated, placing the Senate under equal control between Democrats and Republicans, each with 50 seats. In the event of a tie during a Senate vote, Democratic Vice President Kamala Harris would be asked to break the tie in favor of the Democrats and give the Chamber Democratic control for the first time since 2015.
The results in Georgia are just one component of conventional political wisdom that seems to have vanished from the proverbial door in the face of the COVID-19 crisis, Olson says.
“Obviously, the COVID crisis and the shift in administrations has slowed things down a lot,” he said at the NRMLA Policy Conference. “Usually the state is in January. This year it’s April. Normally a full budget would have already been put in place and the Budgets Committee would have held extensive hearings and would report spending for 2022 over the next few weeks. Instead, this process is rolled back by at least a month or two. But that doesn’t mean that big things don’t happen. “
Because the Democrats have gained control in both the Houses of Congress and the White House, President Joe Biden and the Democrats in Congress have auxiliary laws – like that American Rescue Plan Act – as we move forward with infrastructure spending legislation and a change in income tax brackets for wealthy Americans to offset the cost of such sweeping plans.
What this could mean for reverse mortgages
In relation to what all these moves could mean for mortgages in a broader sense, and for reverse mortgages specifically, the question of policy breadth comes up again. With a similar one presentation At the NRMLA Annual Meeting & Expo in Nashville, Tennessee in late 2019, industry experts noted that the upcoming presidential election and the resulting political deadlock would push aside mortgage-related issues.
It was hard to predict that a pandemic would hit the coast of America, or how debilitating the COVID-19 coronavirus pandemic would be for the entire country at the time, but the combined pandemic and polarized political stance that led to the elections led to it to an extension of the deadlock in and beyond the election campaign. As the pandemic problems gradually subside but still largely persist, mortgages, including reverse mortgages, are likely to take a back seat, Olson said. This is in addition to issues related to the government’s housing hierarchy.
“The line-up of the HUD and FHA has been a little slow,” says Olson. “We don’t even have a candidate for FHA commissioner or Ginnie Mae’s President, let alone a confirmed person for those positions. Failure to fully deploy a leadership team quickly inevitably makes it harder to identify quick and decisive action [from] Federal agencies on key issues. As always, when we turn to Congress, we’re going to watch and watch the approval committees: House Financial Services and Senate Banking. “
Because of the persistence of pandemic-related issues, compounded by the lack of verified guidance at the HUD, FHA, and elsewhere, it becomes more difficult to have active discussions about mortgage-related issues than would normally be the case.
“It is more difficult for the committees – especially the approval committees like Senate Banking and House Financial Services – to follow the normal strict consultation regime on a wide range of issues and then postpone legislation through individual bills, which in turn makes it less likely to be in the near future we see action against major programmatic changes in these housing programs, ”explains Olson. “And finally, the process in the grant committee that we need to watch out for because we need their annual approval to issue new loans to HECM every year as part of the expense bills they fund, as I mentioned earlier, was delayed which increases the likelihood that the autopilot is activated. “
Additionally, the focus on spending initiatives will of course be on the larger legislative proposals coming from the White House to meet its infrastructure spending and tax change goals, which means there is less room to review funds, he explains.