Reverse mortgage counseling in the state of Massachusetts has been allowed to progress remotely by videoconference or telephone for most of the year, but the relief allowing such measures is set to expire once again. in the absence of further action by the state legislature and governor’s office. Charlie Baker (R).
This is consistent with previously published guidance and outlook by reverse mortgage professionals operating in the state, including advisors and originators.
The question of remote advice
Massachusetts is the only state in the nation that requires reverse mortgage counseling to be conducted face-to-face, a requirement that previously ran into safety concerns created by the COVID-19 coronavirus pandemic. Very soon after the declaration of a state of emergency following the pandemic, the House of Representatives and the State Senate passed a bill providing for a statewide moratorium on foreclosures and evictions during the COVID-19 emergency, which also had a provision for telephone or video counseling. for reverse mortgage transactions for the duration of the emergency.
This state of emergency ended on June 15, 2021, but the deadline for telephone or video advice has been extended to December 15.
At that time, in mid-December, the Massachusetts Division of Banking (DOB) issued a letter reminding active reverse mortgage industry participants in the state that the relief allowing telephone advice or Home Equity Conversion Mortgage (HECM) video would end as scheduled. on December 15, 2021. Any loans issued in Massachusetts after that date would be tantamount to requiring counseling sessions to be conducted in person.
Several weeks later, state congressional bodies again extended the relief until July 15, 2022. Although there are indications that some movement has taken place regarding an extension or even a solution potentially permanent to this problem, it has yet to materialize and it is likely that there will be yet another disruption to reverse mortgage activity within the state resulting from this piecemeal approach to relief .
Where are things now
Although the situation remains generally sub-optimal as counseling agencies and lenders must once again wait for government assistance, developments in the matter and the involvement of both the Massachusetts Mortgage Bankers Association (MMBA ) and the National Reverse Mortgage Lenders Association (NRMLA) have been instrumental in finding more relief and potentially other more robust solutions. That’s according to George Downey, founder of Harbor Mortgage Solutions in Braintree, Mass.
“While all of this is going on, I think it’s worth noting that people in the industry here, both associations, have really stepped up to promote the interests of consumers,” Downey told RMD in an interview. .
While these issues do not generally appear to impact customer perceptions of reverse mortgages or their own patience with them, the industry within the state is well equipped to handle this disruption, because it had been the norm for so long. That’s according to Brett Kirkpatrick, partner at Harbor Mortgage Solutions.
“We experienced six years of in-person counseling only in Massachusetts, starting in 2014 until the declaration of an emergency in 2020,” he said. “The elders were very stressed to find transportation to a place far away from them. These are all the difficulties that we have been trying to explain to the legislator for all these years. So hopefully we are only temporarily back in this situation.
For Jennifer Cosentini, director of housing at Cambridge Credit Counseling Corp., the situation may seem a little too familiar and reminiscent of a 1993 film starring actor Bill Murray whose character relives the same day over and over again.
“We are preparing for another break,” she said. “I feel like it’s groundhog day. It’s always the same thing. We’ll wait, we’re ready now for face-to-face in-house counseling. But then I feel like in August or September we will go back to full consultation for a short time.
The long arm of the pandemic
Another complicating factor is that the COVID-19 coronavirus pandemic is continuing, with more virulent strains driving spikes in infection rates across the country. However, the current level of infections in Massachusetts is generally low, and certainly much lower than the surge experienced the last time the counseling waiver expired according to Data from New York Times.
However, because reverse mortgages affect a cohort that is more likely to contract serious illness from COVID-19, Downey believes this remains a factor in the conversation that should be kept in mind by policymakers.
“I think that [COVID-19] is still very much in play,” says Downey. “We are dealing with perhaps the most vulnerable cohort of seniors and their vulnerability to it. We have this new COVID variant which is now heavily publicized here as extremely contagious, and so the recommendation for older people is still very high in terms of contact avoidance. The flip side is that counselors don’t want face-to-face counselling.
Cosentini echoes the concerns of senior customers.
“I’m worried about seniors, to be honest with you,” she said. “I just don’t think they should have to come into a big office and meet a lot of different people. There are other meetings there, but they are going to meet several people, for no reason.
hope is eternal
Once achieved, NRMLA President Steve Irwin described the ongoing work being done by the association and hopes for eventual results.
“There is currently a bill pending that will extend the expiration date for telephone/video counselling,” Irwin told RMD. “The NRMLA, in coordination with our Board Member George Downey, has been advocating, on behalf of our Massachusetts members and the seniors they serve, for the successful passage of this bill. Once we have the extension in place, it is hoped that the bill will pass successfully, which would permanently allow the consumer to choose in their delivery of HECM advice. »
While the disruption created by exhalation last time came around eight weeks, Downey doesn’t think the disruption to activity this time will be as pronounced as what was seen last time.
“Hope is eternal,” says Downey. “I don’t expect a major disruption at all. I’m pretty confident that at a minimum we’ll see an extension that kicks the box up until next year. But hopefully , the other bill would pass and we would have a permanent solution, so I don’t expect any major disruption.
However, he predicts there will be a short period between the expiration of the current relief and when the governor signs a bill that effectively ends most reverse mortgage counseling in Massachusetts.
Cosentini also remains optimistic that a fix will arrive.
“I’m always optimistic, as I always am,” she says. “I still think they’re going to make this permanent, so they don’t. But I will remain optimistic that they will make the change. This is going to have a big impact on our staff because we are hybrid. Now we need to make sure we have staff in the office, and we need to know when they will be there so we can have in-person sessions. It’s going to be difficult for a while. »