(NRMLA) -- WASHINGTON, D.C. – At a time when consensus is hard to find in Washington, members of Congress, advocates for senior citizens, and representatives of financial services companies all agreed that reverse mortgages are an important tool in providing a better life for seniors, during a Congressional hearing on Wednesday
“HECM [The Home Equity Conversion Mortgage program] has been a useful tool, helping hundreds of thousands of seniors maintain their homes and lead more financially stable lives,” testified Peter Bell, president of the National Reverse Mortgage Lenders Association. “The program has been administered thoughtfully, carefully and responsibly by a partnership of stakeholders. This has allowed the reverse mortgage concept to gain a foothold and prove the value of this important personal financial management tool as a component of retirement finance and funding longevity.”
Similar themes – and sometimes even the same language – ran through the five-minute testimonies presented by a federal regulator (HUD Deputy Assistant Secretary Charles Coulter), a lender (Jeff Lewis, CEO of the Generation Mortgage Company), a financial counseling agency (Daniel Fenton, housing director of Money Management International), and two advocates for seniors (Dr. Barbara Stucki, of the National Council on Aging, and Dr. Lori Trawinski, of the AARP’s Public Policy Institute.)
“The HECM is an example of the best kind of government program,” said Lewis. “A program that utilizes the reach and financial heft of the government to leverage private sector involvement, pays for itself, is run largely by the private sector and provides a life-transforming financial product to consumers.”
Additionally, each member of Congress who spoke at the hearing began his or her statement by recognizing the value of reverse mortgages to senior citizens.
Together, the industry participants seemed to share a sense of pride about the success of the program – 780,00 loans, to date – and the frequent readjustments that have been made over the program’s 20 year history to improve it and protect if financially.
However, changes can be made to improve the program and make this resource more accessible for a greater number of seniors. Almost every speaker referenced the need to adjust the limit on the number of HECM loans the Federal Housing Authority is authorized to insure.
“Although the cap has been routinely raised or suspended, its existence deters some industry participants,” Bell testified. “NRMLA urges this Subcommittee to support permanently removing the authorization cap to minimize any possible disruption of HECM.”
The hearing was held by the House Financial Services Committee’s Subcommittee on Insurance, Housing and Community Opportunity.