Massachusetts reverse mortgage counseling relief is about to end, putting state business at risk again

Reverse mortgage counseling in Massachusetts has been allowed to take place remotely via video conference or phone for most of the year, but the relief allowing such measures is about to expire again absent further action from the state legislature and Cabinet of Government, Charlie Baker (right).

This is according to previously published guidelines and perspective from reverse mortgage professionals working in the state, including advisors and originators.

The issue of remote counseling

Massachusetts is the only state in the country to require reverse mortgage counseling to be conducted face-to-face, a requirement that previously ran into safety concerns created by the COVID-19 coronavirus pandemic. Early after a state of emergency was declared due to the pandemic, the state 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 included a provision allowing telephone or video counseling for reverse mortgage transactions for the duration of the emergency.

This state of emergency was lifted on June 15, 2021, but the deadline for phone or video consultations was extended until December 15.

By this time in mid-December, the Massachusetts Department of Banking (DOB) had issued a letter reminding reverse mortgage industry participants active in the state that the relief allowing telephone or video-based mortgage conversion (HECM) counseling would scheduled to end on December 15, 2021. All loans originating in Massachusetts will revert to requiring in-person counseling sessions as of that date.

A few weeks later, state congressional authorities extended the relief again until July 15, 2022. While there are indications that some movement has occurred toward an extension or even a potential permanent solution to this problem, it has yet to materialize and is there will likely be another disruption to the state’s mortgage turnaround business as a result of this piecemeal approach to relief.

Where things stand right now

While the overall situation remains suboptimal, with counseling agencies and lenders having to wait for government relief once again, movement on the issue and the involvement of both the Massachusetts Mortgage Bankers Association (MMBA) and the National Reverse Mortgage Lenders Association (NRMLA ) played an important role in the search for more relief and potentially other more robust solutions. That’s according to George Downey, founder of Harbor Mortgage Solutions in Braintree, Massachusetts.

“While all of this is going on, I think it should be noted that the people in the industry here, the two associations, have really stepped up to promote the interests of consumers,” Downey said in an interview with RMD.

While these issues generally don’t seem to affect customers’ perceptions of reverse mortgages or their own patience with them, the industry in the state is well-equipped to deal with this disruption because it’s 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 in Massachusetts alone, starting in 2014 until the state of emergency was declared in 2020,” he said. “The elderly were seriously stressed about finding transport to a place that was very far from them. These are all the difficulties we have been trying to explain to the legislator all these years. So we’re only hoping to get back into that situation temporarily.

For Jennifer Cosentini, director of housing at Cambridge Credit Counseling Corp., the situation feels perhaps all too familiar and reminiscent of a 1993 movie starring actor Bill Murray, whose character relives the same day over and over again.

“We’re gearing up for another hiatus,” she says. “I feel like it is Groundhog day. It’s the same thing over and over again. We will wait, we are already prepared for internal face-to-face counseling. But after that, I feel like in August or September we’ll be back to full consulting for a short time.

The long arm of the pandemic

Another complicating factor is that the COVID-19 coronavirus pandemic is ongoing, with more virulent strains leading to 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 advisory relief expired, according to data from New York Times.

However, because reverse mortgages affect a cohort more susceptible to serious illness from COVID-19, Downey believes it remains a factor in the conversation that should be considered by decision makers.

“I think that [COVID-19] it’s still a work in progress,” Downey says. “We are dealing with perhaps the most vulnerable group of elderly people and their vulnerability to it. We have this new variant of COVID that is now heavily advertised here as highly contagious, so the recommendation for the elderly is still very high in terms of avoiding contact. The other side of this is that counselors don’t want the face-to-face counseling.

Cosentini echoes concerns about elderly customers.

“I worry about the adults, to be honest with you,” she says. “I just don’t think they should come to a big office and meet with a few different people.” There are other encounters there, but they will encounter several people, for no reason.

Hope springs eternal

Although the disruption created by the leak last time occurred about eight weeks ago, Downey doesn’t believe the disruption to business this time around will be as pronounced as what was seen last time.

“Hope springs eternal,” Downey says. “I don’t expect a big disruption at all. I’m pretty confident we’ll at least see an extension that ends the road sometime next year. But we hope that the other bill will be passed and we will have a permanent solution. So I don’t expect a big disruption.”

However, he expects there will be a short period between the expiration of the current relief and when the governor signs a bill that would effectively end most reverse mortgage counseling in Massachusetts.

Cosentini also remains optimistic that a fix is ​​on the way.

“I’m still optimistic as always,” she says. “I always thought they would do this permanently, but they don’t. But I will remain optimistic that they will make the change. This will 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 tough for a while.”

RMD reached out to NRMLA representatives but did not receive a response as of press time.

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