Mortgage

Mortgage industry officials warn of halt to reverse mortgage originations without immediate legislative action

Mortgage industry officials warn of halt to reverse mortgage originations without immediate legislative action
Written by Publishing Team

Baker Governor

BOSTON — Hundreds of seniors seeking financial stability through reverse mortgages could see their plans teeter to a halt unless the Massachusetts legislature acts to extend the governor’s emergency order on COVID that expired Dec. 15.

The subject of the dispute is state law that mandates personal counseling for all reverse mortgage applicants. Massachusetts is the only state in the country that does not allow reverse mortgage advice by phone or videoconferencing.

However, in April 2020 Governor Charlie Baker introduced a COVID-related measure that temporarily allows for counseling by phone or video conference. The measure, which made it possible for seniors and counselors to interact without fear of COVID transmission, ended on December 15.

If the legislature extended the order, as was expected, it would have avoided the crisis.

There is a bill, H1146, that would make telephone and video consultations pending. This bill likely won’t be worked on until next spring. Meanwhile, major homeowners are left with the dilemma created by legislative inaction.

George Downey, founder of Harbor Mortgage Solutions in Braintree and a board member of the National Mortgage Lenders Association, urged the legislature, which meets Thursday, to pass the measure.

“If they do nothing, the ability of hundreds of seniors to take advantage of the equity in their homes during this very difficult time will be impossible. There is no rationale for Massachusetts to be apart from every other state when it comes to giving seniors flexibility in arranging safe advice. effective on the mortgage,” Downey said.

Downey said there are multiple factors contributing to the potential downtime.

Only eight reverse mortgage advisors are currently licensed in the state. None of them are scheduling internal meetings due to COVID concerns, including the rapid spread of the Omicron variant.

As a result, seniors are required to drive to one of only six advisory offices in the state, located in Quincy, Agawam, Hyannis, Auburndale, Stoneham and Woburn.

“For many seniors, having to drive such long distances for in-person meetings amid growing concerns about the coronavirus is a non-starter. Not having the ability to conduct these sessions by phone or videoconferencing is a serious hurdle,” Downey said.

The Massachusetts Association of Mortgage Bankers and the National Mortgage Lenders Association sent letters to legislative leaders urging them to pass the comprehensive bill. According to the MMBA, about 1,500 seniors each year in Massachusetts use reverse mortgage products.

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