While the mortgage industry and Federal Housing Administration have responded favorably to the recent granting of authority to the FHA to make reverse mortgage program changes, AARP is expressing disappointment over the process by which change will take place.
The advocacy organization spoke in favor of the Department of Housing and Urban Development going through the rule making process to implement Home Equity Conversion Mortgage program change during a congressional hearing earlier this year.
At the time, AARP’s Senior Strategic Policy Advisor Lori Trawinski expressed concerns about bypassing the rule making process.
“While we support the idea of tax and insurance escrows or set-asides, the public should have the opportunity to comment on the specifics of such program changes during the normal rule making process to ensure that changes contain adequate consumer protections and are reasonable regarding the amounts to be escrowed or set aside,” Trawinski said in testimony before members of Congress.
AARP this week responded to the changes in a statement to RMD.
“We are deeply disappointed that HUD can now circumvent due process in an attempt to solve problems in the HECM program without the benefit of public comment,” said Cristina Martin-Firvida, Director Financial Security and Consumer Affairs, AARP State and National Group.
AARP stressed the need for comments from those who have experienced problems with reverse mortgages as an integral component of developing program fixes.
“Hearing from those affected by these problems and experts on reverse mortgages is an indispensable step in addressing the challenges that have resulted from dramatic market changes over the past decade,” Martin-Firvida said. “The HECM program needs reforms to address these challenges, but failure to allow for comment is short sighted and will not provide the information needed to solve the HECM program’s long term or even short term problems.”
Written by Elizabeth Ecker