The head of the FHA says more housing counselors should receive reverse mortgage training
Federal Housing Administration (FHA) Commissioner Julia Gordon has more thoughts on that U.S. Department of Housing and Urban Development (HUD)-approved housing counselors should be trained to work with Home Equity Conversion Mortgage (HECM) borrowers, according to perspectives she shared this week during an online housing conference hosted by HUD.
The news first reported Through Within mortgage financingcomes amid expectations that HECM borrowers may look to extract more equity from their homes as mortgage rates have fallen. In turn, lenders will take note of the trend and try to compete for HECM refinance business.
“We’re entering a declining interest rate environment, and what that’s going to mean is that reverse mortgage lenders, along with mortgage lenders in the futures market, are going to be looking for opportunities to refinance,” Gordon said. the report.
The housing counseling community and HUD need to be “very, very aware of the efforts to get seniors to refinance their HECMs,” Gordon said. HECM-to-HECM refinancings should be considered by borrowers in the context of all their circumstances. Rates are one factor, but the length of time a home is occupied should also be taken into account, she said.
During the COVID-19 pandemic, the historically low interest rate environment pushed HECM-to-HECM refinancing activity to account for a significant portion of sector volume in 2021 and 2022, reaching nearly half of all endorsements in both years. However, when interest rates rose significantly, the refi boom disappeared.
At the height of the boom, some reverse mortgage lending professionals reported fielding more inquiries from borrowers who had received refinancing requests. Industry marketing professionals have strived to emphasize the importance of judicious use of marketing materials sent to key seniors in the reverse mortgage industry.
Last year at the National Association of Reverse Mortgage Lenders (NRMLA) Annual Meeting and Exhibition in Nashville, David Berenbaum – Deputy Assistant Secretary of the Office of Housing Counseling at HUD – spoke about the importance of adding more HECM counselors across the country.
“[W]We want to increase our collaboration with NRMLA, and with all of you as industry professionals,” he said in 2023. “This is a priority for us. As Americans age, we know that there will in fact be an increase in the number of mortgages taken out, and we will also see an increase in the reverse mortgage for the purchase side of the equation. There is a crucial role for housing advice.”
