Reverse Mortgages Regulations

Goals

To find information on pending reverse mortgage regulations at the federal level/within the State of California or the reverse mortgage regulations discussed during the last term of the Obama administration.

Early Findings

Current Administration

  • In September 2019, the Trump administration announced "proposed changes to the U.S. Department of Housing's reverse mortgage program, the Home Equity Conversion Mortgage (HECM)."
  • The secretary of the U.S. Department of Housing and Urban Development (HUD), Ben Carson delivered a written testimony in September that noted the proposed changes.
  • Carson's recommendations in his testimony included:
  • A recommendation for the amendment of HECM's loan limit structure by Congress to “reflect variation in local housing markets and regional economies across the U.S. instead of the current national loan limit set to the level of high-cost markets in the forward program.”
  • A proposal to congress to "set a separate HECM capital reserve ratio and remove HECMs as obligations to the MMIF (Mutual Mortgage Insurance Fund), on the basis that it would allow more “transparent accounting of the program costs and decrease the cross-subsidization that occurs with mission borrowers in the forward mortgage portfolio.”
  • A proposal that “FHA eliminate HECM-to-HECM refinances as these loan transactions result in greater appraisal inflation, increasing program costs, and negatively impacting GNMA guaranteed HECM MBS (HMBS) due to quick ‘churn’ in pool participations.”
  • Carson testified before the House Financial Services Committee noting that financial volatility within the HECM program is still a constant challenge. However, he noted that HUD proposed a number of key reforms to ensure the product remains a viable option for America’s seniors that desire to ‘age in place'".

Past Administration

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