The Massachusetts Department of Banks (DOB) issued a letter Tuesday reminding participants in the reverse mortgage industry active in the state that the exemption allowing telephone or video counseling for mortgage conversion (HECM) will expire as planned on December 15, 2021. Any loans that have arisen In Massachusetts beginning on that date will require counseling sessions that must be conducted in person. This is according to a notice issued by the state DOB and obtained by RMD.
While the severity of the epidemic has diminished over the past year with the widespread availability of vaccines and the development of other treatments, cases across the country are accelerating again due to the more virulent nature of the “Omicron” variant and recently detected cases accelerated markedly within Massachusetts during the 30’s. past day.
Given that COVID-19 more prominently affects seniors and is associated with a more contagious variant, organizations including the Massachusetts Mortgage Bankers Association (MMBA) and the National Mortgage Lenders Association (NRMLA) have attempted to communicate the necessity of extending the deadline to the state legislature. The last time such a requirement interacted with the need for physical distancing caused by the pandemic, the state’s reverse mortgage business was suspended.
A request for comment from the Massachusetts Department of Defense had not been returned at the time of this publication.
According to reverse mortgage specialists active within the state, the announcement by the DOB surprised many because long-term solutions designed to allow continuous phone or video counseling have been rolling out for several months, before the latest deadline extension delivered in June.
In a comment letter submitted by the MMBA to the state legislature last week and reviewed by the Department of Risk Management, the organization highlighted several shortcomings in the advice that could be addressed by extending the December 15 deadline or creating a more permanent solution. State-certified counselors who can provide sessions are a slim resource, with only five full-time counselors and one part-time counselor able to provide such services in the state. These numbers for the number of available advisors are unchanged from the numbers shared with the Risk Management Department (RMD) six months ago.
In June of this year, Massachusetts Governor Charlie Baker extended the previously set deadline, allowing phone and video consultations for an additional six months. While a bill intended to permanently address in-person counseling requirements was introduced as early as March of this year, the proposed legislation appears to have stalled without additional deliberation based on publicly provided information made available by the Massachusetts legislature.
Both MMBAs and in-state reverse mortgage professionals have described the persistent shortage of available counselors approved by the Massachusetts Executive Office of Aging and the US Department of Housing and Urban Development (HUD). This lack of available advisors remains the most pressing concern of the expired state relief reverse mortgage business.
During the COVID-19 emergency, more than 400 counseling sessions have been conducted through video or telephone means according to the MMBA, a measure taken to reduce the likelihood that older Massachusetts residents will be exposed to COVID-19 or more aggressively. variables. Massachusetts remains the only state in the country that requires you to complete reverse mortgage counseling sessions in person.
In-state influence on expiry deadline
According to a Massachusetts reverse mortgage advisor, the fact that no action is taken to provide a permanent solution to these issues is baffling.
Jennifer Cosentini, director of housing at Cambridge Credit Counselling Corp. Agawam, Massachusetts, is based on the faltering bill: “I am shocked that no action has been taken on this legislation.” “Why is Massachusetts willing to put our counselors and seniors at risk?”
A new pause in the in-state reverse mortgage business may be worse than the pause seen in March 2020 according to George Downey, founder of Harbor Mortgage Solutions in Braintree, Massachusetts. One reason is that cases within the state have risen dramatically in the past 30 days, with new infections on November 12 reaching 3,988. On December 13, that number swelled to 11,672, according to data from the New York Times.
“We’ve seen a spike in COVID cases, and seniors, being a vulnerable group, are advised to avoid gatherings and in-person meetings,” Downey told RMD in an interview. “[Counselors] There are no people coming to their offices anymore. Just in terms of logistics, we only have five people who can serve the entire population of the state. Given this and the burden this places on elderly people with mobility issues, they must travel unusual distances. Islanders on Martha’s Vineyard or Nantucket have to take a boat or plane.”
Late Tuesday, a possible lack of a DOB notice issued to industry participants regarding the effective date of December 15 was revealed. The notice specifies that the Application date cannot be included after December 15th. In certain cases, the request may arrive before or after the scheduled counseling session. It is not clear whether, for example, a filing date of December 15 will allow counseling that is set after that date.
What the reverse mortgage industry can do
When asked what the reverse mortgage industry should have in mind about the difficulties faced by reverse mortgage professionals in Massachusetts, Downey emphasized the need to engage with state lawmakers to ensure they have accurate information about the standards of a modern reverse mortgage product.
“This problem started in 2009 and stemmed from a well-meaning but misguided advocate who promoted legislation to mandate personal counseling,” Downey explained. “It’s not what these people know, it’s what they don’t know, and as well-meaning this person was, he wasn’t fully aware of the inner workings of a reverse mortgage.”
Likewise, legislators are unaware of the specific dynamics of reverse mortgages, and they are often given inaccurate information by ingredients that only multiply many negative — and importantly, incorrect — perceptions about the product category, Downey says.
“One suggestion in different states is that local providers reach out to lawmakers to explain and educate them about what the product is and what it isn’t, so they become less likely to be people of goodwill proposing legislation,” Downey said. Once legislation is enacted, it is difficult to change. For 12 years, we’ve been fighting this problem, and the responsible people in this industry need to meet state legislators and agencies and educate them about what this program is all about.”
The history of reverse mortgage counseling relief, and the impact of the epidemic on seniors
In March of 2020, during the early days of the COVID-19 pandemic, the reverse mortgage business within Massachusetts was effectively closed due to the imposition of virus mitigation measures and physical distancing requirements issued by both state and federal health authorities, in coordination with the state of emergency as declared by Governor Baker .
In April 2020, the Massachusetts House and Senate passed a bill establishing a statewide ban on foreclosures and evictions during the COVID-19 emergency, which also included a provision allowing telephone or video advice for foreclosure transactions Reverse real estate for the duration of an emergency. This state of emergency ended on June 15, 2021, but the deadline for telephone or video consultations has been extended to December 15.
In an interview in June, Cosentini told RMD that the impact on seniors seeking reverse mortgage advice was readily apparent based on her conversations with clients.
“Our clients in Massachusetts were very happy that they didn’t have to come into the office,” Cosentini said in June. “When we put together this data looking at how far these seniors would have to travel to come see us, in many cases they were hundreds of miles away. So, they were so happy they didn’t have to. Many of them were clients that we offered They have had advice in the past, now they are refinancing and they think they will have to come and see us face to face. They were very happy and they didn’t have to do it this time.”
According to a recent New York Times report, the United States is on the cusp of a total death toll of 800,000 deaths attributable to COVID-19. Approximately 600,000 of these deaths occurred in people 65 years of age or older.
The report begins: “As the coronavirus pandemic approaches the end of its second year, the United States stands on the cusp of over 800,000 deaths from the virus, and no group has suffered more than older Americans.” “All the while, it has been known that the elderly are more vulnerable, but the scale of the loss is only now beginning to fully become apparent.”
Editor’s note: Additional details regarding the DOB notice and how you might interact with the consultation taking place before or after December 15 have been added to the story.