The National Reverse Mortgage Lenders Association (NRMLA) this week announced that Jonathan Scarpati, senior vice president of wholesale production at Finance of America (FOA), has joined its board of directors for the remainder of the 2024 term.
Scarpati is a 20-year reverse mortgage industry veteran, having joined Senior Lending Network in 2003 as vice president of sales for the company’s wholesale and lead distribution divisions. In 2014, Scarpati joined Urban Financial of America, the predecessor entity of Finance of America Reverse (FAR), which is now rebranding under the FOA umbrella.
Scarpati expressed excitement for his new role.
‘’I am extremely honored to serve on NRMLA’s Board of Directors for the rest of the 2024 term,” Scarpati said. “With over two decades of industry experience, paired with the fact that I have served in a range of sales and marketing roles, I have a unique perspective on the inner workings of the industry, including greater insight into what is happening on-the-ground in production.
“I am eager to continue our important work supporting the reverse mortgage industry and helping drive it forward so more older homeowners can use their home equity to live their best life in retirement,” he added.
NRMLA President Steve Irwin said he is looking forward to Scarpati’s contributions.
“I am delighted with Jonathan Scarpati’s acceptance of his nomination to the NRMLA Board of Directors,” Irwin said in a statement. “Given Jonathan’s deep experience in the reverse mortgage space, his participation will enhance our Board’s ability to meet the unique challenges facing our industry and help execute on our strategic imperatives for the reverse mortgage industry of tomorrow.”
FOA President Kristen Sieffert also lauded the appointment.
“Jonathan has been at the core of driving reverse mortgage adoption and awareness for the mortgage industry for over 20 years,” Sieffert said in a statement. “His deep experience of the category, coupled with his unique perspective of what wholesale partners need to succeed, make him very well suited for the NRMLA Board.
“We congratulate Jonathan on his well-deserved appointment and look forward to continuing to support the work and education needed to make home equity for retirement a mainstream concept.”
Scarpati’s entrance comes on the heels of a career transition for FOA’s Scott Norman, who was appointed as CEO of the Texas Mortgage Bankers Association (TMBA) earlier this month. Norman was in his fifth term as co-chair of NRMLA at the time of his appointment, and he previously served as FOA’s VP of field retail and director of government relations.
Congratulations, Jonathan. I am sure you will were selected wisely and will do the kind of job expected of you.
However, as an inactive CPA, I am far more concerned about the pathetic state of HECM endorsements than who is or who is not on the board of our trade association. Total HECM endorsements last fiscal year were under 33,000 making it the second worst fiscal year for HECM endorsements since fiscal 2003. Fiscal 2019 ended up the worst fiscal year since fiscal 2003. Based on recent stats provided by HUD, there is little doubt that this fiscal year (ending 9/30/2024) will be the worst fiscal year for HECM endorsements in 21 years with an outcome that is likely to be materially under 30,000 HECM endorsements.
HUD recently issued a report showing the NPVs (net present values) of future cash flows from the cohorts of endorsed HECMs that are accounted for in the MMIF (Mutual Mortgage Insurance Fund) by year of endorsement. Surprisingly fiscal year 2022 was projected at over $800 million — NEGATIVE. Worse, fiscal 2022 had the best HECM endorsement total of any fiscal year since fiscal year 2011. The reason for the negative projection should be obvious, adverse selection. In the report by MMIF management there was no other fiscal year with that kind of negative NPV for future cash flows as of 9/30/2023.
For some reason those less informed about business in general, believe that the greater the number of HECMs endorsed in a fiscal year, the greater the profit to HUD. Where they get this mythical idea is unknown but myth it is. Few understand the problem faced by HUD when the increased volume is a result of adverse selection. Somehow the self proclaimed industry of education must educate itself on the results that HECMs have on the MMIF. So far it sounds like the party of JL of 2009 fame.
Among a group of four of us, one member has suggested that to calm down and reduce adverse selection, the index of the expected rate should be calculated much differently than it is now. Upon hearing the idea, another member called it genius (I was silent on both accounts although I agree with both the former and the latter). Rather than a weekly calculation, it should be done once annually. Rather than the index being based on a weekly average of the ten year CMT, it should be an average of the most recent years such as based on the median life of a HECM or some arbitrarily selected period of years such as ten, fifteen or twenty. For example, the index for the expected rate for fiscal year 2025 might be the average of the ten year CMT from August 1, 2009 through July 31, 2024. This would be the index for the expected rate for the fiscal year which starts October 1, 2024 and ends September 30, 2025; the margin would be added in a similar manner as it is now.
I hope the current NRMLA Board will separate itself by its creativity and forward thinking in the midst of a reverse education environment.