Mortgage Industry Officials Warn of Halt to Reverse Mortgage Originations
Mortgage Industry Officials Warn of Halt to Reverse Mortgage Originations without Immediate Legislative Action
By: PR Works
At issue is a state law that mandates in-person counseling for all reverse mortgage applicants. Massachusetts is the only state in the nation that does not allow reverse mortgage counseling by phone or videoconference.
However, Gov. Charlie Baker in April 2020 introduced a COVID-related measure that temporarily permitted counseling by phone or videoconference. That measure, which made it possible for seniors and counselors to interact without fear of COVID transmission, expired on Dec. 15.
Had the Legislature extended the order as was expected, the crisis would have been avoided.
A bill, H1146, that would make telephone and video counseling permanent is pending. That bill likely won't be acted upon until next spring. In the meantime, senior homeowners are left with the dilemma that legislative inaction created.
George Downey, founder of Harbor Mortgage Solutions in Braintree and a board member of the National Reverse Mortgage Lenders Association, urged the Legislature, which meets on Thursday, to pass the measure.
"If they do nothing, the ability of hundreds of seniors to leverage the equity in their homes during this extremely stressful time will be rendered impossible. There is no rational reason why Massachusetts should be so out of step with every other state when it comes to giving seniors flexibility in arranging for safe and effective reverse mortgage advice," Downey said.
Multiple factors are contributing to the likely halt, Downey said.
Only eight reverse mortgage counselors are currently licensed in the state. None of them are scheduling in-house meetings due to COVID concerns, including the rapid spread of the Omicron variant.
As a result, seniors have to drive to one of just six counseling offices in the state, located in Quincy, Agawam, Hyannis, Auburndale, Stoneham and Woburn.
"For many seniors, having to drive such long distances for in-person meetings amid heightened COVID concerns is a non-starter. Not having the ability to conduct these sessions by phone or videoconference is an insurmountable obstacle," Downey said.
The Massachusetts Mortgage Bankers Association and the National Reverse Mortgage Lenders Association have sent letters to legislative leaders urging passage of the omnibus bill. According to the MMBA, some 1,500 seniors annually in Massachusetts utilize reverse mortgage products.