It’s likely fair to say that compared with the outlook one year ago, as we were anticipating the arrival of 2020 in the waning days of the prior year, things generally worked out quite a lot differently than people were expecting. 2020 brought with it an enormous set of challenges for people all over the globe, and any discussion about that year will understandably go straight to those pressing issues that we are all still contending with today.
However, when you look more closely at the news surrounding the reverse mortgage industry, what you see is a product category and a business that managed to weather many of the early uncertainties brought about by the pandemic and come out on the other side with a largely productive year in the rearview mirror. The top 10 stories on RMD, as tabulated based on internal traffic data, paint a picture of an eventful time in the industry’s history exemplified by pitfalls and promises alike.
So, as we get ready to bid farewell to one tumultuous year and welcome a new one, we thought we’d take a look back and present the top 10 most read and talked about stories that appeared on Reverse Mortgage Daily in 2020.
1) What Happens When a Reverse Mortgage Borrower Becomes an Originator (Feb 2)
The most read story on RMD for the year explains how a former reverse mortgage skeptic, and a community leader in his local area, not only became a reverse mortgage borrower but took the further step of joining the industry as an originator. Don Larson of Thrive Mortgage was a longtime acquaintance of Thrive’s national reverse mortgage director Loren Riddick, and an encounter between the two men saw Larson eventually serve as an originator on Riddick’s team.
2) U.S. Department of Justice Files Complaint Against Reverse Mortgage Company (Sep 29)
The U.S. Department of Justice (DOJ) is not typically an agency of the federal government that appears in RMD stories, but its action against Nutter Home Loans over the lender’s reverse mortgage activities from over a decade ago garnered a lot of attention from the RMD readership. DOJ filed a complaint against Nutter for allegedly forging certifications and using unqualified underwriters to approve Federal Housing Administration (FHA)-backed Home Equity Conversion Mortgage (HECM) loans originated between 2008 and 2010.
Nutter has vehemently denied the allegations, with a representative for the company describing the complaint as “baseless” and “devoid of reliable facts.” The case has since been transferred to the Western District Court of Missouri, and attorneys for Nutter have filed a motion to dismiss.
3) Trump Budget Sheds Light on Reverse Mortgage ‘Wish List’ (Feb 12)
An important part of the job for any presidential administration is the compilation and release of a federal budget proposal, which can help to set the course of the agenda for the presidency and members of Congress in determining the course they think is best for the country. Rarely is there an instance where any president gets everything they want out of their budget proposal, but the thing that makes this one interesting is that it features several provisions related to reforming the HECM program including reverse mortgage counseling, and HUD’s commitment authority.
4) Quicken Halts One Reverse Mortgage Operations, Shifts Focus to Rocket Mortgage (Feb 18)
Undoubtedly the first proverbial “bombshell” story of 2020, One Reverse Mortgage parent company Quicken Loans announced at the time that it was “pausing” its reverse mortgage operations in order to focus its resources more squarely on its increasingly popular Rocket Mortgage brand. The result is that one of the biggest reverse mortgage lenders in the nation effectively ceased operating overnight, but at this point in mid-February no one had any idea about the way things would change a mere month later.
5) Coronavirus Impacts on Reverse Mortgage Operations, Meeting Clients (Mar 12)
In the early days after the declaration of the COVID-19 outbreak as a pandemic by the World Health Organization (WHO), the immediate impact on the reverse mortgage industry was not yet clear. In this story, RMD hunted down information to learn how originators across the country were reacting to the news of the pandemic, and adjusting their operations in order to further ensure the safety of the seniors they serve.
6) Class Action Suit Against Reverse Mortgage Lenders, Servicers Dismissed (Sep 17)
A class action lawsuit filed in the Eastern District Court of New York in October of 2018 against reverse mortgage companies Live Well Financial, Reverse Mortgage Funding (RMF) and Compu-Link Corporation (Celink) was dismissed indefinitely, though the plaintiff has the option to refile against Live Well after its own, well-documented legal woes have been settled. Celink and RMF were determined by a presiding judge due to a lack of “plausible claims” against both companies.
7) New York Reverse Mortgage Foreclosure Bill Signed by Gov. Cuomo (Dec 17)
A very recent addition to this lineup but a highly-read story nonetheless, New York Governor Andrew Cuomo signed into law a bill requiring area lenders to notify the state’s Department of Financial Services (DFS) and mortgagors of an impending foreclosure action on reverse mortgage borrowers. As this is still a recent story, reverse mortgage industry participants who stand to be most affected by the new law in the state have told RMD they are still assessing its potential impacts, but we’ll be sure to check in on how lenders and servicers are adjusting in the new year.
8) FHA Relaxes Appraisal, Documentation Requirements During Coronavirus Crisis (Mar 29)
One of the most consistent themes arising from the reverse mortgage industry climate in 2020 among its leaders has been gratitude toward the federal government for stepping up to provide necessary relief as everyone attempted to adjust to the abrupt new realities of the COVID-19 pandemic. One of the most visible relief measures taken in March was allowing appraisals to be conducted through either exterior-only inspections or through desktop-only appraisals in an effort to minimize contact and transmission of the virus between people, allowing for appraisals to still take place while observing social distancing guidelines and other COVID-19 mitigation efforts as recommended by the Centers for Disease Control and Prevention (CDC).
The desktop-only option would later be allowed to expire, but the latest relief measures by HUD in response to COVID-19 has kept the exterior-only appraisal option in place through the end of February, 2021.
9) Why a Senior May Opt for Alternative Equity Over a Reverse Mortgage (Oct 11)
Since RMD aims to cover reverse mortgages and wider topics related to tapping home equity, examining the potential attractiveness of alternative equity tapping products — such as sale leasebacks or shared equity investments — makes sense. During RMD’s inaugural event HEQ: The Future of Home Equity in Retirement, we asked leaders at three leading alternative equity tapping companies what they think they could bring to the table for a senior considering either one of their options, or a more traditional reverse mortgage.
10) Lending in the Pandemic: Three Reverse Mortgage Surprises (May 18)
After having some time to absorb some of the impacts and implications of the COVID-19 pandemic on the reverse mortgage industry, originators across the country made three very interesting observations about how borrower activity has changed as a result of the health crisis. A pair of originators out of California related that borrower motivation to close had been enhanced to a very noticeable degree, while a branch manager in Colorado noted that borrower tech savviness had increased significantly.
Finally, a Virginia originator noted that younger borrowers within the reverse mortgage demographic — in their 60s — began to take more serious, visible interest in the product category.
