FHA Commissioner, HUD Counseling, Chief of Serving Seniors with Reverse Mortgages

Federal Housing Administration (FHA) Commissioner Julia Gordon and David Berenbaum, Deputy Assistant Secretary of the Office of Housing Counseling at the U.S. Department of Housing and Urban Development (HUD), returned to this year National Association of Reverse Mortgage Lenders (NRMLA) Annual Meeting and Expo in San Diego.

Both leaders were in a reflective state of mind. They looked back at what has been accomplished over the course of the Biden-Harris administration in terms of overseeing HUD and FHA loan programs, along with expanding the availability of housing counseling services.

In a sit-down interview with HousingWireAt the Reverse Mortgage Daily (RMD), held on-site at the event, Gordon and Berenbaum discussed how the reverse mortgage program impacts their responsibilities.

‘We need to house many more people’

When asked how her perspectives on the Home Equity Conversion Mortgage (HECM) program have evolved over time, Gordon spoke about its market authority relative to other HUD and FHA programs, and how the higher interest rates has influenced HUD’s work and mission. .

“Across all lending at the moment, we have been affected by the interest rate environment, and that has affected every sector,” Gordon said. “Volumes across our portfolio have fallen, which is expected and not alarming from a risk perspective. It is of course alarming because our country has an affordable housing crisis and we need to house many more people.”

That, she says, is HUD’s raison d’être, but it comes with the necessary understanding that these programs exist in a larger macroeconomic environment. Interest rates will rise or fall, and other headwinds – such as pandemics or financial crises – will emerge.

“So I think it’s less important to compare HECM to other products than it is to think about the health of the HECM sector right now,” she said. “How are reverse mortgages used? [and] accepted by the market, and how are they sold on the secondary market?

Determining how well these systems work and whether or not there is enough liquidity in the industry are the questions HUD has focused on most. But there are also cases where they HUD, FHA and Ginny Mae have taken up the challenge.

“At FHA and Ginnie Mae, we have tried to make changes or improvements to address these challenges,” she said. “Overall, I think the policy changes and adjustments over the past two years have been remarkably successful.”

With much of the focus on the secondary market since late 2022, Gordon added that the focus will likely return to the origination side, “and how we attract new customers to this product. [while making it] making it as safe, effective and useful a product as possible.”

Lubricate the ‘squeaky wheel’

Gordon previously spoke about the relative ease she has had working with the reverse mortgage industry. When asked whether or not that comes from stakeholder passion, Gordon pointed out that the adage “the squeaky wheel gets the grease” may not apply to her role in the traditional sense.

“As Assistant Secretary of Housing, there are dozens of wheels squeaking every day,” she said, laughing. “It’s just a cacophony of screeching wheels. But I will repeat something I said on stage, which is that when I leave and people look back on what the hallmarks of Commissioner Gordon’s period here were, I hope that one of them is that we were open and transparent and responsive to suggestions and feedback.”

HUD and FHA believe in continuous improvement of the programs they oversee. Gordon said they emphasize the importance of listening to active industry members – “our eyes and ears in the field” – when developing responses.

“I’m grateful in all the areas that I work to have had people in the industry or in the consumer advocacy community who know they can reach out to us and tell us what they’re seeing in all of these areas,” she said. “But this also applies to HECM. We have heard something from the field that we actually didn’t know about, and then we can say: ‘We can do something about that.’ So it’s not really about who shouts the loudest; it is the one that brings us useful items.”

This also applies to the counseling side of the equation, Berenbaum said.

“I think the Office of Housing Counseling has focused on who our consumer is, and in this case it’s the elderly and seniors across the country,” he said.

“Recently, the latest issuance of the Modernization Rule will help seniors across the country interact with housing counselors in the way they feel most comfortable, whether in person or over the phone, or as more and more seniors use Zoom or Microsoft Teams or other tools to connect with other certified housing counselors.”

Industry and consumer feedback has also kept the office focused on meeting the growing needs of seniors, he explains. This is especially true as aging grows in popularity and importance in the choices older Americans make later in life.

The needs of seniors are becoming more acute

“Unfortunately, as our commissioner has noted, there is a terrible shortage of rental housing that is affordable to seniors,” Berenbaum said. “The idea of ​​moving into a rental property after you’ve lived in your house, it’s often more expensive to live in that rental today than it is to continue living in the house and growing older.”

This represents an argument for a healthy reverse mortgage market with strength in both advisory flexibility and available product options, he said. The need for a strong HECM market only escalates when you consider that seniors are becoming increasingly important fastest growing group of unhoused individuals in the nation.

“It started during the pandemic and has only continued to grow,” Berenbaum said. “I am very pleased with the steps our office has taken to increase the availability of housing counseling across the country.”

Berenbaum detailed some of the important statistics about the size of the HUD counseling roster and the growing need for HECM-certified counselors.

“Essentially, we’ve asked all of our training grantees to work with us to increase the number of HECM-certified advisors, and we have a large pool of advisors that we can draw from and move on to these more advanced and, frankly, more difficult form of certification,” he said.

However, this difficulty is justified because it ensures that “as they get older, reverse mortgage products or other choices they make as they age are the right choice.”