It can be said that compared to the outlook a year ago, as we expected the arrival of 2020 in the last days of the previous year, things generally went very differently from what people expected. 2020 brought tremendous challenges for people around the world, and any discussion of that year will understandably lead directly to the pressing issues we all still grapple with today.
However, if you take a closer look at the news surrounding the reverse mortgage industry, you will see a product category and business that managed to weather much of the early uncertainties caused by the pandemic and, on the other hand, with a largely productive one Year in the rearview mirror. The top 10 stories on RMD, tabulated based on internal traffic data, paint a picture of an eventful time in the history of the industry illustrated by pitfalls and promises alike.
So as we prepare to say goodbye to a turbulent year and welcome a new one, we thought we’d take a look back and present the top 10 most read and spoken stories to appear on Reverse Mortgage Daily in 2020.
1) What if a reverse mortgage borrower becomes an originator? (February 2nd)
The most-read RMD story of the year explains how a former reverse mortgage skeptic and community leader not only became a reverse mortgage borrower, but took the next step in the industry as an originator. Don Larson of Thrive Mortgage was a long-time acquaintance of Loren Riddick, Thrive’s national reverse mortgage director, and an encounter between the two men led Larson to eventually serve as an originator on Riddick’s team.
2) US Department of Justice files complaint against Reverse Mortgage Company (September 29th)
The U.S. Department of Justice (DOJ) isn’t usually a federal government agency that appears in RMD stories, but its lawsuit against Nutter Home Loans for the lender’s reverse mortgage activities from over a decade ago caught a lot of RMD readership’s attention. The DOJ filed a complaint against Nutter for allegedly forging certifications and using unqualified underwriters to approve Federal Housing Administration (FHA)-assisted Home Equity Conversion Mortgage (HECM) loans between 2008 and 2010.
Nutter has vehemently denied the allegations, a representative of the company described the complaint as “baseless” and “without reliable facts”. The case has now been referred to the Western District Court of Missouri and Nutter’s attorneys have moved to dismiss.
3) Trump budget highlights “wish list” for reverse mortgages (February 12th)
An important part of the job of any presidential administration is preparing and publishing a draft federal budget that can help set the course for the presidency and members of Congress to determine which course they believe is best for the country. There is rarely a case where a president gets the most out of his budget proposal, but the interesting thing about this one is that it contains several provisions related to reforming the HECM program, including reverse mortgage advice and the HUD’s commitment authority.
4) Quicken stops One Reverse Mortgage Operations and shifts focus to Rocket Mortgage (February 18)
Undoubtedly the first proverbial “bombshell” of 2020, One Reverse Mortgage parent company Quicken Loans announced at the time that it was “pausing” its reverse mortgage operations to focus its resources more on its increasingly popular Rocket brand Focus on Mortgage. The result is that one of the largest reverse mortgage lenders in the country went out of business practically overnight, but by that time, in mid-February, no one had any idea how things would change a month later.
5) Coronavirus Impact on Reverse Mortgage Deals, Hit Customers (March 12th)
In the first few days after the World Health Organization (WHO) declared the COVID-19 outbreak a pandemic, the immediate impact on the reverse mortgage industry was not yet clear. In that story, RMD searched for information to learn how creators across the country reacted to the news of the pandemic and adjusted their operations to further ensure the safety of the seniors they were caring for.
6) Reverse mortgage class action lawsuit, servicer dismissed (17th of September)
A class action lawsuit filed in the Eastern District Court of New York in October 2018 against reverse mortgage lenders Live Well Financial, Reverse Mortgage Funding (RMF), and Compu-Link Corporation (Celink) has been dismissed for an indefinite period, despite plaintiff surrendering Live Resubmit Well after resolving its own well-documented legal issues. Celink and RMF were ruled against both companies by a presiding judge for lack of “plausible allegations”.
7) New York Reverse Mortgage Foreclosure Bill from Governor Cuomo. signed (December 17th)
New York Governor Andrew Cuomo is a very new addition to this list, but a well-read story nonetheless. As this is still a new story, participants in the reverse mortgage industry hardest hit by the new law in the state have told RMD that they are still assessing the potential impact, but we will definitely look into how lenders and Adjust service provider service in the new year.
8th) FHA relaxes assessment and documentation requirements during the coronavirus crisis (March 29th)
One of the most persistent themes emerging from the reverse mortgage industry climate in 2020 was gratitude to the federal government for their efforts to provide the relief necessary as everyone tried to adapt to the abrupt new realities of the COVID-19 pandemic adapt. One of the most visible relief measures taken in March was that assessments could be conducted through either field inspections or desktop assessments to minimize contact and transmission of the virus between people so that assessments can continue to take place while complying with the Social distancing guidelines and other measures to contain COVID-19 as recommended by the Centers for Disease Control and Prevention (CDC).
The desktop-only option would later be allowed to expire, but the HUD’s latest relief efforts in response to COVID-19 have kept the external-only rating option until the end of February 2021.
9) Why a Senior May Choose Alternative Equity Over a Reverse Mortgage (October 11th)
Since RMD aims to cover reverse mortgages and broader issues related to home equity appropriation, it makes sense to examine the potential appeal of alternative equity accumulation products – such as sale leasebacks or shared equity investments. During the opening event of RMD HEQ: The Future of Home Equity in Retirement, we asked executives from three leading alternative public companies what they thought they could bring in for a senior if they were considering either one of their options or a more traditional reverse mortgage.
10) Lending In The Pandemic: Three Reverse Mortgage Surprises (May 18)
After lenders across the country absorbed some of the impact and repercussions of the COVID-19 pandemic on the reverse mortgage industry, they made three very interesting observations about how borrower activity has changed as a result of the health crisis. A pair of originators from California reported that borrowers ‘motivation to close had increased significantly, while a branch manager in Colorado found that borrowers’ technical expertise had increased significantly.
Finally, a Virginia originator noted that younger borrowers within the reverse mortgage demographic – in their 60s – showed a more serious and visible interest in the product category.