Reverse mortgage professionals are navigating a “more labored current reality” marked by high interest rates, rising upfront costs and longer loan processing times, even as optimism grows around product innovation and technology adoption.
That’s according to Steve Irwin, president of the National Reverse Mortgage Lenders Association (NRMLA), who sat down with HousingWire‘s Reverse Mortgage Daily ahead of the association’s Western Regional Meeting that’s set for June 9.
The conference, Irwin said, is expected to focus on themes including aging-in-place technology, reverse mortgage product development, retirement planning strategies and policy modernization efforts surrounding the Home Equity Conversion Mortgage (HECM) program.
Editor’s note: This interview has been edited for length and clarity.
Sarah Wolak: Let’s start by giving readers an event preview. What do you think about the state of the industry right now? What do you think the biggest themes are that will dominate conversations at the Western Regional meeting?
Steve Irwin: I think there are several. I look at it as providing a best-in-class opportunity. There are issues around social matters, technological matters, economic matters and political matters. We’ll be touching on all of that, so it seems to me to touch on a greater situational awareness. We’re going to have a great session on aging tech and how to reposition reverse mortgage products — not just exclusively as financial tools but enablers of independence, safety and dignity in the home.
We will also be bringing forth a great panel discussion designed to equip top-producing reverse mortgage originators with frameworks, language and real-world insights needed to make reverse purchase financing a primary revenue driver. We’re also going to touch on better positioning of reverse mortgages as part of broader retirement income, liquidity, housing and legacy planning.
Top originators will win, we think, in this complex market, not by selling one product better than the other, but by fully diagnosing a client’s situation and finding the right products to fit those situations.
We are also pleased to have Richard K. Green, a real estate economist and director of the University of Southern California Lusk Center for Real Estate, to speak on today’s macroeconomic environment and what this means for the reverse mortgage marketplace.
Wolak: Given that you hear from reverse lenders every day, what buzz are you hearing the most about in the current market environment compared with a year ago?
Irwin: It continues to be a grind. Fortunately, I hear from NRMLA members quite often. Things are picking up, but it’s a grind, and our hopes are to make it less of a grind and more of a flow.
Wolak: What do you think is contributing to the grind right now?
Irwin: Just getting individual cases through the pipeline is taking a lot more attention in the current interest rate environment. Upfront cost is always a concern, and getting people qualified into a variety of reverse programs is challenging. It can be done, but it’s taking a lot more effort, and therefore it’s much more of a grind.
Wolak: Do you think that people still have a cautious outlook, or is there some optimism in the space right now?
Irwin: I do not want to convey that it’s not an optimistic outlook. “Grind” does imply a slog and a bit of pessimism, but it’s not a pessimistic outlook. Day to day is more of a grind, but it’s just a more labored current reality.
Wolak: If you want one takeaway for your attendees at the Western Regional Meeting, what would that be?
Irwin: Our attendees will leave with an actionable blueprint for continued business development.
Wolak: Will that be just from the sessions or are there going to be workshops?
Irwin: The sessions will be interactive. I wouldn’t define them as workshops, per se, but the learnings coming out of these sessions will be actionable.
Wolak: Speaking of actionable, what do you think is showing the most momentum right now in the space? Is it proprietary products or is it something else?
Irwin: I think where we’re seeing a lot of interesting momentum right now is product development, which is touching on the proprietary product space a lot. I think there’s a lot of research and development going on, but I also think that we’re seeing advances made in technology implementations, whether it’s aging-in-place technologies or just the manufacturing of a reverse mortgage.
The technology tools and innovations are pretty impressive. As we work more and more with the Mortgage Industry Standards Maintenance Organization (MISMO) to get those data standards in place, we’re going to see technological interoperability efficiencies that will be most impressive.
Wolak: Switching to NRMLA’s current legislative goals, can you offer an update on HUD’s request for information (RFI) or the legislative work NRMLA is prioritizing right now?
Irwin: NRMLA has submitted to the U.S. Department of Housing and Urban Development, the Federal Housing Administration and Ginnie Mae a supplemental memo around our responses to the RFI. I have arranged a meeting in the very near future with the NRMLA executive committee and executive leadership at HUD to further discuss ways to modernize the HECM program.
Wolak: What is NRMLA pushing in terms of what urgently needs modernization?
Irwin: I’d rather not get ahead of this meeting with HUD and Ginnie Mae. We further expand on some of the points made in our response to the RFI. There are opportunities, we feel, with the initial mortgage insurance premium and ways to examine that, which may bring down upfront costs to reverse mortgage borrowers.
We think there are ways — without getting into too much detail — to make the whole processes around collateral assessment and second appraisals, when required, more efficient. There are efficiencies to be gained there with more modern tools that are available in the marketplace. And we think the whole process around buyouts of cases that hit 98% (of the maximum claim amount) that are in Ginnie Mae pools can be reexamined.
Wolak: Could you provide an overview of the top legislative priorities on NRMLA’s plate right now?
Irwin: At a federal level, we really just work to stay engaged with the authorizers of the FHA HECM program. We hope to advance solutions around the statutory cap of HECMs that’s in place, and we’re making a lot of progress in that regard.
Already this year, we’ve met with senior policy advisers at the House Financial Services Committee and the Senate Banking Committee. We’ve engaged with Sen. Mike Crapo’s office, Rep. Emanuel Cleaver’s office, Sen. Elizabeth Warren’s office, and Chairman French Hill. We’ve been working it pretty hard, but it’s an education and an ongoing conversation in the House and in the Senate, with both parties involved around the importance of the ability of older homeowners to be able to monetize their accumulated equity as part of a solid retirement finance plan.
We are constantly updating on program changes and marketplace dynamics. It’s not always about a legislative ask, but it is sharing of information. We think these relationships on Capitol Hill are strong, and our priority is to keep people informed and keep those relationships strong.
At the state level, the work that our members have done in Tennessee is huge. Crafting amendment language to amend that legislation in Tennessee so as to accommodate products beyond just first-lien products has been huge, and we look forward to that getting signed into law. I really thank our members in Tennessee who have done most of the heavy lifting in that regard.
Wolak: When you have conversations with Congress, do you feel like they have a good understanding of the work NRMLA is doing and the conversations that should be happening about retirement and marketplace dynamics, or is there a long way to go?
Irwin: I think there’s a solid understanding. That’s across years of building relationships on Capitol Hill, staying informed and being totally transparent about what we work on. There is general support on Capitol Hill for the HECM program, and people understand how important it is.
There can be policy differences and policy perspectives on the role the government may need to play in retirement and in housing across different administrations and different parties, but staff and legislators all understand the role that housing wealth can play in retirement finance.
