FHA senior housing official talks about reverse mortgage updates and policy priorities
While the US Department of Housing and Urban Development (HUD) has many key leadership positions that remain to be filled as the 100th day of administration approaches Joe Biden – including the critical roles of Federal Housing Commissioner Administration (FHA) and Assistant Secretary of HUD – At the moment, the primary authority for FHA rests with the Assistant Principal Assistant Secretary (PDAS) for the Housing Office and FHA Lopa P. Kolluri.
Ms. Kolluri is a housing expert with over 25 years of experience in affordable housing, community and economic development, having held leadership positions in the public and private sectors as a practitioner and decision maker at all levels.
She joined HUD for the second time in February 2021 under the leadership of Secretary Marcia Fudge and spoke to participants in the reverse mortgage industry at the National Reverse Mortgage Lenders Association (NRMLA) Virtual Policy Conference. this week after being introduced by NRMLA CEO Peter Bell.
FHA and reverse mortgage industry ‘working for the same result’
PDAS Kolluri began her remarks with an introduction, stating that while she may be new to both HUD’s housing office and to the reverse mortgage industry audience served by the trade association, she does feels united with members of the reverse mortgage industry for a common goal: to help the elderly.
“My team speaks very well about the collaboration and commitment between NRMLA and FHA, and I really look forward to continuing this positive and mutually beneficial working relationship,” began PDAS Kolluri. “Because at the end of the day, I believe we’re trying to achieve the same result.”
Regarding these common goals, PDAS Kolluri listed three: to ensure that older Americans continue “to have the support and options they need to age in place if they choose to do so.” ; Meet the immediate needs of Home Equity Conversion Mortgage (HECM) borrowers affected by the COVID-19 coronavirus pandemic; and ensure the operational viability and viable financial status of HECM as a tool for American seniors, she explained.
While Secretary Fudge has yet to make an explicit public comment on the HECM program during her tenure as HUD secretary, PDAS Kolluri was quick to link the political priorities of the secretary and the president. to the objectives of the HECM program within it. remarks.
“[Secretary Fudge] made it clear that HUD, under his leadership, will focus on serving those who need us most: the homeless, the most vulnerable individuals, families and groups, and those who are too often and for too long. underserved by our country’s housing system, ”Kolluri said. “Secretary Fudge has also made it clear that we need to make sure our programs and policies work and that they need to work to achieve greater equity in homeownership for underserved groups. This includes homeowners who would now have fewer options to stay at home without the HECM program. This is the cornerstone of why the HECM program exists.
Importance of aging in place
The importance of aging in place, especially in light of the ongoing COVID-19 pandemic, helps illustrate for HUD and FHA the need to have a viable and sustainable HECM program, PDAS Kolluri said.
“Aging in place has become even more important over the past year as older people seek to protect themselves and their families from COVID-19,” she explained. “We have a full, full-time team at HUD to make sure the millions of people struggling with COVID get the financial help they need.”
One example she cited is the work HUD did in conjunction with the Treasury Department after the passage of the American Rescue Plan Act, as well as additional allowances for the Department to act on its own authority. This includes relief for HECM borrowers behind on required tax and insurance payments, and repeated extensions of due and payable claims so that seniors affected by the pandemic cannot be left out.
The work of designers, increase volume levels
PDAS Kolluri also praised reverse mortgage originators for continuing to work diligently amid the pandemic, especially as many contact processes have been mitigated or replaced with virtual and / or contactless options to limit the spread of the virus. This is evident in the amount of HECM volume the Ministry has processed since 2019, she explained.
“Through your work with the HECM program, we collectively continue to support homeowners without disruption, and this is evident in the current volume of HECM that we are seeing,” she says. “Last February, the FHA insured over 4,000 HECMs, created by many of you who are listening today. As of February 28, we had active insurance on over 432,000 HECMs and a maximum claim amount of $ 125 billion. “
After a visible drop in fiscal year 2019, PDAS Kolluri explained how the volume started to rise again last year with a maximum claim amount of over $ 16 billion at the end of fiscal year 2020. To At the end of the 2021 fiscal year, it still offered a slight look to the future based on internal departmental data.
“While I cannot forecast the end of fiscal 2021, the volume is currently slightly higher than last year,” she said. “At the end of February, we served nearly 20,000 seniors through the [HECM] program [in the current] nowadays. “
The need for further refinement
The reverse mortgage program and the industry around it are no strangers to change, and PDAS Kolluri has indicated that further changes may be on the horizon, but will require further consideration once new leadership positions are taken on. within the Ministry will be filled.
“I don’t think we can wait for the future to act,” she said. “The pandemic will subside at some point, and I believe we will come away with a more solid model for doing mortgage business, both in times of crisis and in good times. Part of the immediate preparation for the future means that we must continue to refine the HECM program to ensure its long-term sustainability. “
Reiterating Secretary Fudge’s commitment to serving historically underserved and disadvantaged populations, PDAS Kolluri encouraged HECM’s business book performance in the Mutual Mortgage Insurance Fund’s report in 2020, while acknowledging that the fact that it remains negative – albeit hardly the case – meaning that further improvements may be required.
“[W]We know we need to do some work to meet the more immediate needs of HECM creation and maintenance. [systems], “she explained.” We have to meet the demands of non-borrowing spouses, so that all of the same protections when the borrower is no longer at home. [We must] better understand the challenges HECM managing agents face with due diligence deadlines to verify the date of death of a borrower. And, we want to continue to address the implications of no longer using the [London Interbank Offered Rate (LIBOR)] index to old HECM variable rate mortgages in our public operations. “
Learn about PDAS Kolluri’s remarks in the coming days on RMD.