Disqus - Latest Comments for The_Critic

Re: Cherry Creek Mortgage LOs learn HECMs to grow business

The_Critic — Tue, 11 Sep 2018 14:47:57 -0000

A few years back, adding even full-time HECM originators from those who originate forward mortgages was considered a very poor move for the reverse mortgage industry. Now that we are not just seeing forward mortgage originators being added to the HECM originators, but they are only trained to be part-time.

Desperation makes strange bedfellows.

Re: HECM professionals set to gather in Texas for Reverse Mortgage Day

The_Critic — Sun, 19 Aug 2018 18:00:16 -0000

For many originators, this is the most economical day of reverse mortgage meetings and education available. Congratulations to Scott Norman and his continued efforts to bring excellence to his region.

Little has been stated about the confusion now becoming more prevalent in the industry when interchanging the acronym, "HECM," with the term "reverse mortgage." Reverse mortgage is the all encompassing name for all mortgages meeting the definition of 15 USC 1602(bb). HECMs are a specific type of reverse mortgage insured by FHA and proprietary reverse mortgage is the common term to describe all reverse mortgages that FHA does NOT insure. When Lehman Brothers began introducing its Cash Account ("LBCA"), the term "jumbo reverse mortgage" began growing in popularity since the LBCA offered more proceeds than the HECM at significantly higher home values than the HECM highest lending limit.

The title and article confuse HECM and reverse mortgage. As the saying goes, all dogs are animals but not all animals are dogs.

Re: QuantumReverse Software Platform Announces New Hires

The_Critic — Sat, 10 Mar 2018 18:10:50 -0000

George,

I think No_Drama meant to say "competition spawns excellence" without any apostrophe.

But what I think you are saying is that the town is not big enough for both of them, either revenue wise or excellence wise.

Re: Financial Assessment Continues to Reduce Reverse Mortgage Defaults

The_Critic — Thu, 09 Nov 2017 03:26:03 -0000

James,

Perhaps I can make this real simple.

Say a chocolate tasting expert is hired to hold a contest at Ghiaradelli Square in San Francisco to taste eight bowls of ice cream (representing the two samples in each of the parts of the New View Commentary on how the results from financial assessment have gotten better and better). He starts with four sets of two bowls each progressively getting larger as the tests progress.

In the first test, each bowl has one spoon of plain Vanilla ice cream. The first bowl has two small teaspoons of Smucker's butterscotch syrup added and the second bowl two spoons of the same size but filled with Ghiaradelli's dark chocolate syrup.

Re: What HUD’s New Rules Mean for the Reverse Mortgage Industry

The_Critic — Sat, 09 Sep 2017 15:51:44 -0000

REVGUYJIM,

You have your work cut out for you. There is no change for the Initial Disbursements Limitation. You could try explaining it as the second limitation on the amount of proceeds that available to seniors in the first 12 months. The first is obviously the applicable principal limit.

Re: HUD to Raise Premiums, Tighten Limits on Reverse Mortgages

The_Critic — Sat, 09 Sep 2017 15:32:11 -0000

Why wasn't NRMLA involved in this process? For years its leaders have implored us to vote Democratic and have belittled efforts of Republicans.

Perhaps this repulsion of Republicans is a reason why the executive leadership at HUD have not taken NRMLA leadership into its confidence.

We need NRMLA leadership that is less tied to any political party. NRMLA has failed to provide any real answer to cure the losses currently hemorrhaging out of the HECM program. Even after financial assessment was in effect for a year, the actuaries had so little confidence in the ability of financial assessment to stop the bleeding that it predicted that the new book of business for last fiscal year alone would end in a discounted cash flow loss of over $1.2 billion and this fiscal year of almost another billion.

Financial assessment cannot cure losses that are generated because at termination the value of homes are less than the HECMs balances due. That is why HUD has finally dug down and did what is needed and that is lower PLFs even further.

Re: [Updated] Ben Carson Accepts Trump Nomination to Serve as HUD Secretary

The_Critic — Sat, 09 Sep 2017 15:09:35 -0000

mdreversemortgage,

I have seen in my lifetime several men who should have never become President and at least one who should have been in office longer. LBJ wanted a war and refused to allow the generals to extend the war beyond certain arbitrary lines resulting in the vast cost of needless Americans and Vietnamese. Nixon was so inept not even Eisenhower gladly endorsed. Carter who is a great humanitarian by some standards and a man who knew nothing about the economy. Finally Ford who showed wisdom in his statesmanship but lost the Presidency because he did.

Carson is at least trying to stem the losses on new business at HUD. No one in the Obama Administration came close and several of those who over saw HUD were supposedly very experienced in housing matters which was never seen in the HECM program.

Re: One Reverse Rolls Out New Ad Campaign Without Winkler

The_Critic — Sun, 25 Jun 2017 22:00:05 -0000

"If it sounds too good to be true...."

Isn't it time to be looking for higher endorsements rather than higher conversation rates?

Re: New Firm Acquires HERMIT Reverse Mortgage Software

The_Critic — Thu, 23 Mar 2017 15:25:14 -0000

John,

I give up. What is a "Briant idea?" The only thing I could find is that in Celtic (assume Irish rather than French) it means "Strong."

Re: CFPB Uncertainty Reigns in Reverse Mortgages and Beyond

The_Critic — Thu, 02 Mar 2017 17:14:50 -0000

The author states: "...the agency, which was designed to operate independently from the desires of legislators." Ignoring the fact that the CFPB is not an agency but a bureau, does it matter what prior legislators intended if the will of the current legislators differ? Yes, its proponents can point to precedence in the original legislation but in a deeply partisan Congress what does precedence mean when the legislation was created by the other Party?

Representative Waters tells us legislation proposed by Senator Ted Cruz is: "...part of “President Trump’s Wall Street First agenda.” Senator Cruz, really??? It seems in the world of the Representative, not only was she once a millennial and Putin is advancing in Korea. Why isn't someone getting her to her doctor's?

Re: Researchers Reveal Biggest Roadblocks to Reverse Mortgage Borrowing

The_Critic — Thu, 15 Dec 2016 15:05:00 -0000

Warren,

Volume? You really have no idea how losses are determined in the MMI Fund.

Winners look to get rid of losers who are DRAGGING their profits down. Ask any FHA single family forward lender what is dragging what. If they are knowledgeable, they have already been complaining to those who represent them in Congress and also HUD about how HECMs keep the forward mortgage MIP too high and are impeding the growth of the profitable FHA forward home loans.

Your comment shows how weak our industry is in understanding why the MMI Fund is negative. Is it any wonder we encourage HUD to take all of the wrong steps to positive ending balances in the HECM portion of the MMI Fund?

Enjoy the holidays and if you can stand it, watch the Congressional hearings on the FHA.

Re: Researchers Reveal Biggest Roadblocks to Reverse Mortgage Borrowing

The_Critic — Mon, 12 Dec 2016 18:42:40 -0000

Warren,

Nice suggestion but the HECM program has not turned to meet the expectations that Reagan had believed it would. It is NOT self-sustaining.

Those supporting the President Elect's new spending proposals will be looking everywhere that losses seem out of control to plug them up or shut them down -- whatever it takes....

Re: [Updated] Ben Carson Accepts Trump Nomination to Serve as HUD Secretary

The_Critic — Tue, 06 Dec 2016 15:51:05 -0000

Mr. Bell,

The source was MSNBC. (So it is true you cannot trust left wing propaganda. That will teach me.)

Looks like Fox is a much better source. Should have listened to Bill and Rush.

Thanks for correcting my error.

Re: [Updated] Ben Carson Accepts Trump Nomination to Serve as HUD Secretary

The_Critic — Tue, 06 Dec 2016 15:48:35 -0000

mdreversemortgage,

There is a point where even doctors must retire for the sake of their patients. What a person was yesterday is not what they are necessarily today.

Dr. Carson will certainly take us in a new direction. Unfortunately that may not bode well for HECMs.

Re: Top Regions, Lenders Dodge Declining Reverse Mortgage Volume in November

The_Critic — Mon, 05 Dec 2016 15:59:35 -0000

Almost everyone has dodged this downturn now and then but who has dodged it completely since 9/30/2009? This is a product whose demand has been more than cut in half since its pinnacle. So is keeping volume from falling for another two months a great accomplishment or simply holding off the inevitable?

There is no question that many are doing much to move ahead but so far financial assessment seems to be pushing us back further.

Re: [Updated] Ben Carson Accepts Trump Nomination to Serve as HUD Secretary

The_Critic — Mon, 05 Dec 2016 15:42:24 -0000

What is so important about what he did this in relation to Trump or that? What is and remains important is like any HUD Secretary appointee what will his walking orders be? Followed by how long of a leash is he on? Next comes the question of what his personal positions in areas of discretion actually are. Will he report to VP-elect Mike Pence or Reince Priebus, the announced Chief of Staff?

As our primary regulator it is important we get over the election and start getting to know our new regulatory leader his to be announced team. It is stupid strategy to simply write off this appointee as a caricature of some Republican waffe.

Dr. Carson is a great humanitarian with actual credentials of saving human life. He is our first African American HUD Secretary, if consented to by the Senate. How he will fare as the Secretary of a federal government department is yet to be seen. How effective he will be in some part will have to do in some part on how we work with him.

Re: Reverse Mortgage Loan Limit to Increase in 2017

The_Critic — Mon, 05 Dec 2016 15:12:12 -0000

REVGUYJIM,

Wow, where is your optimism? Yes, it is a great thing HUD is doing for upper middle income senior homeowners but why so pessimistic about the position of HUD senior staff on this issue?

Re: Originating: Closing the Gap Between Financial Advisors and Reverse Mortgage Originators

The_Critic — Sun, 30 Oct 2016 20:34:33 -0000

The article is riddled with very questionable statements, not all of which can be addressed in this comment. To start, when an industry goes from delivering 58,000 units in one year to less than 49,000 the next, how is that a "burgeoning industry?" In fact last fiscal year, which ended just last month, was the worst fiscal year for endorsements in over a decade. Let us take out the salesman's puff from the article to see if its conclusions hold up against facts.

"Rather, you need to educate them on the importance of the FHA insurance and the features and protections it supports." Where can one find an FHA insurance policy between borrower and the FHA? It is between the lender and FHA. Yes, borrowers pay for the costs of the insurance just like they pay for any additional pass along costs that the lender incurs as part of the cost of the mortgage. Yet the mortgage is nonrecourse because HUD will not endorse a reverse mortgage that is recourse. In fact it is against federal law for any reverse mortgage to close and be recourse. [See 15 USC 1602(bb)].

"Financial advisors who are uninformed about the lower-cost options now available." Since October 4, 2010, there have been no lower cost options with HECMs. Margins are higher as is total MIP costs. Unless the unpaid balance remains low and is not outstanding for any length of time at all, 1.25% MIP has created a massive increased cost. For example, look at a HECM with the older 0.5% for ten years versus the 1.25% rate when the unpaid balance of the loan at closing was $200,000 and the older loan saw an average effective interest rate of 4% and the newer one, 4.75%. After 10 years with no other activity, the cost of ongoing MIP at an annual rate of 0.5% is $12,600 and $34,141 at 1.25%. That $21,541 difference at termination is nothing to be scoffed at.

Some might point to upfront MIP and want to talk about 0.5% and 2.5% but then one must consider lenders who pay part or all such higher costs. In this industry we have the opportunity to speak facts or to speak like salespeople overcoming objections.

"It’s no secret that home equity is quickly becoming a more regularly acknowledged component of the fiduciary standard, which requires advisors to put their clients’ interests above their own." The quotation is utter nonsense. Please point out one specific example of where that is true. Not even the DOL has imagined that connection since the principal residence is outside their jurisdiction.

"Moreover, incorporating reverse mortgages into their retirement strategy arsenal will mean more of their clients’ invested assets can remain under their management, and for an extended time period." Now the author is appealing to one who has no fiduciary responsibility at all. This is clearly not appealing to any fiduciary standard showing the author does not buy into the fiduciary claim he made in the quotation in the prior paragraph.

"I challenge anyone to show me how the majority of those homeowners would not be better served by a HECM line of credit instead." And yet with a market growing annually by over a net 1,000,000 new eligible retirees, not only are endorsements diminishing on an annual basis but so is the number of active HECMs. It seems the homeowners and their advisors were saying no in greater numbers than we have seen in over a decade.

As one industry veteran stated in 2010: "If we expect financial advisors to do the heavy lifting for us, such reliance is to our own detriment." He does not stand alone in that assessment.

Re: These Are the Cities Powering Reverse Mortgage Volume in 2016

The_Critic — Fri, 16 Sep 2016 03:24:51 -0000

In the midst of a tragic fiscal year for endorsements, it is nice to find some silver lining.

Re: Last Word: A Birthday and a Milestone

The_Critic — Thu, 15 Sep 2016 17:49:10 -0000

With the comment on selling, one quickly realizes, that the writer has not originated a HECM in years.

Re: Selleck TV Spots Push AAG’s Reverse Mortgage Marketing to New Heights

The_Critic — Sun, 21 Aug 2016 13:51:37 -0000

Some of the celebrities used in the past have been looked upon as loved actors but with little substance in serious matters. Senator Thompson was tied too close to the Republican Party for many liberals even though he had gravitas.

Tom on the other hand is not known for his political stances; however, he is widely viewed as a likable but serious person. Thank goodness his Magnum PI days are far behind him and one somewhat sophisticated mystery made for TV movie series (Jesse Stone) plus an outstanding police show (Blue Bloods) about the NYC justice system are far more current. Of all things, on his latest show he seems like a serious but affable grandfather, children and grandchildren would confide in rather than a guy you would want to play beach volleyball with at 30 years old or younger like he was in Magnum nor does he have the alcoholism of Jesse Stone.

On top of that Mr. Selleck is almost one of the Baby Boomers, just one year older than the oldest of the Baby Boomers.

Re: Moody’s Gives ‘Average’ Rating to Finance of America Reverse Jumbo Business

The_Critic — Sun, 31 Jul 2016 21:54:34 -0000

The post states: "These borrowers have a loan limit of $2.25 million, instead of the Home Equity Conversion Mortgage loan limit of $625,500." But is that true?

It is my understanding that the $2.25 million is not a loan limit as with HECMs but rather the maximum loan proceeds a borrower can obtain with the jumbo reverse mortgage. With the HECM, the loan limit is simply the maximum value of the home that can be used in computing the maximum available loan proceeds a borrower can obtain which is less than $500,000 even at 99 years old.

$2.25 million seems to be the equivalent of the HECM maximum principal limit rather than the HECM loan limit.

Re: CNBC: As Social Security Flattens, Reverse Mortgages Enhance Retirees’ Buying Power

The_Critic — Wed, 27 Jul 2016 12:51:40 -0000

Melinda,

Where do you get your information? 12 USC 1715z-20(g) states: "The aggregate number of mortgages insured under this section may not exceed 275,000." In fiscal 1989, the limit was 2,500 with a maximum termination date which were both changed in 1991 as indicated below:

Subsec. (g). Pub. L. 101–508, §2106, substituted ‘‘September
30, 1995’’ for ‘‘September 30, 1991’’ and ‘‘may not exceed 25,000’’ for ‘‘may not exceed 2,500’'.

The caps kept being changed until the maximum number became 275,000 with no maximum date. When that was reached, it has been the custom of Congress to suspend the maximum number of endorsements annually in the budget process with the maximum termination being September 30 of each year. In this budget bill there is a proposal to remove all endorsement caps on HECMs. Hopefully we will see that proposal passed but we have been hoping for that for years.

Re: New Study Finds Seniors Hold Biggest Share of U.S. Housing Wealth

The_Critic — Wed, 27 Jul 2016 12:22:24 -0000

REVGUYJIM,

Good question but it seems to me someone will jump in and say that those aged 62-64 do hold that much housing wealth as we know both amounts help the industry sell HECMs! So the truth is relative to what helps us sell more HECMs, not in facts.

Re: New Study Finds Seniors Hold Biggest Share of U.S. Housing Wealth

The_Critic — Wed, 27 Jul 2016 12:13:00 -0000

John,

Please, do not take me wrong. I am not against having the material we need to produce closings. What I am greatly against is losing our integrity doing it. If we just latch onto everything that is positive on the Internet, eventually we will find ourselves doing that in all we do. People think they can isolate their lack of integrity to one area but that rarely is the case.

Facts can hurt our industry. Since that is the case, we need to change. Let us never be so optimistic that we begin embracing lies as our marketing content. Long-term, truth and facts matter far more than lost closings now. If positive articles alone could change our monthly endorsement counts, we should have seen much better counts for well over a year by now.