From 2010 to 2024, the reverse mortgage industry attempted to offer remote reverse mortgage counseling in Massachusetts, citing a lack of physical advisors and logistical challenges for senior clients.
But as time went on, state lawmakers seemed unwilling to seriously consider the proposal, and the disruption of the COVID-19 coronavirus pandemic helped change the dynamics of the situation.
RMD has been reporting on the situation for much of this period, including the worsening of the pandemic and the urgency it brought to the state’s businesses until a law was passed allowing for a permanent exception to remote consultations.
Early years
In late April 2010, Massachusetts Senate Introduced bill requiring in-person reverse mortgage counseling.
The law, sponsored by the Senate Joint Committee on Housing and Urban Development, bans the origination of a reverse mortgage unless the borrower “expressly elects a reverse mortgage in writing, certified by a third-party organization consultant,” and personally signs it. Regarding loan suitability.
The bill was finally passed unanimously on May 4 of that year. Sponsored primarily by then-Sen.Susan Tucker (D), she told the outlet Project live broadcast The state’s reverse mortgage situation amounts to the “Wild West” for seniors.
According to publication founder John Yedinak’s reporting on the passage of the RMD bill, she recalled, “She heard sad person after sad person selling annuities and convincing people to take reverse mortgages for huge commissions. The Loan Story”.
In a subsequent interview, George Downey, the state’s leading reverse mortgage professional and a longtime advocate for relaxing strict in-person counseling requirements, explained to RMD that the original intent of the legislation was The Good: A community activist tries to ensure more seniors have access to loans.
‘Logistical difficulties’
The industry responded quickly at the time.Sponsors are concerned about how the law will restrict business, while the company’s communications representative Massachusetts Bankers Association Highlighting the problem people in the state later said had materialized. “The proposed changes would be logistically difficult,” Jedinak reported in May 2010.
“Especially for people in rural areas and people with limited mobility, [the rep] Says face-to-face consultations can be a challenge. Organizations providing counseling must increase staffing to handle more face-to-face contact, he said.
In August 2010, this restriction was further tightened to apply to anyone who meets the label of “low-income senior”. then, National Reverse Mortgage Association The NRMLA told RMD that of the 3,600 consultations conducted in Massachusetts in 2009, “approximately 130 of those were face-to-face, equivalent to a 96 percent opt-out of face-to-face consultations,” the RMD report said. “Based on a recent ‘mystery shopping’ experiment, the association found only eight agency-approved in-person counselors across the state.”
Over the next decade, this number will further decrease to approximately five. Although industry advocates succeeded in delaying the requirement until 2014, that did not improve the trajectory of current counselors.
COVID-19 changes dynamics
The rule came into full effect in 2014, after attempts to delay implementation of the rule until 2016 failed.
“[W]We have this mandatory face-to-face counseling, but there are a lot of seniors who don’t have access to counseling, so we continue to fight,” Downey told RMD in 2015.
Although former Massachusetts Rep. Paul Brodeur introduced legislation to eliminate the in-person requirement shortly after the bill passed, legislation to that effect never materialized. At this point, Broad turned the issue over to the state’s 32nd Middlesex successor, Rep. Kate Leeper-Garabedian (D), who took office in 2019.
As this requirement continues into early 2020, the COVID-19 outbreak and its ability to cause more severe illness in older adults will come into direct conflict with a series of regulations that limit the conduct of in-person business. The combination of the in-person reverse mortgage counseling requirement and the mandate limiting in-person business effectively blocks any reverse mortgage business in the state.
“Of course, everything is closed,” Downey said in an interview with RMD. “People are working remotely and the mandate for face-to-face consultations is actually being offset because people can’t go out and have consultations.”
Legislative action to temporarily relax in-person requirements came quickly, but it was still not enough to completely remove the requirement that created logistical challenges for seniors to schedule appointments for consultations. It would be four years before a permanent solution officially came into effect.
The road to permanent restoration
Paul Brodeur was elected mayor of Melrose, Massachusetts (located in the greater Boston metropolitan area) in November 2019. In-person attendance requirements during annual legislative sessions.
She filed a bill seeking a permanent solution in 2020, but in the years that followed, temporary relief was favored over permanent solutions.The process was lengthy and involved state industry stakeholders, legislators and trade groups including the NRMLA and Massachusetts Mortgage Bankers Association (Master of Business Administration).
“The result of the pandemic was the approval of the concept,” said Brett Kirkpatrick. federal savings bankis another leading advocate of permanent legislation. “This means that the sky is not falling when older people are only being counseled over the phone; it is still effective. We have built up a good track record and the counseling agencies play an important role.
Downey and Kirkpatrick said the agencies surveyed customers about their preferences, which proved to be a major factor in the permanent change to the finish line last month.
Not only can clients more easily attend counseling sessions, but so can family members (who are often a reverse mortgage borrower’s most trusted advisors), no matter where they are in the world, strengthening the consumer protection argument.
Passes relax requirements
After a series of temporary extensions over several years following the pandemic, the last of which expired at the end of March 2024, again threatening the existence of the state’s reverse mortgage business. Some kind of permanent solution written into legislation.
“We’ve been on a full-court press for the last three months trying to make this happen, and it finally worked,” Kirkpatrick said. “Thanks to Kate and other representatives, we were able to get [the permanent fix] Attached to the budget bill. A budget bill is always the tool of choice because it is what must be passed.
The legislation, which included easing in-person requirements, passed in the final days of April and was quickly signed into law by Gov. Maura Healey (D). It includes a retrospective provision that allows for remote consultation to take place during the period between the expiration of the last extension and the commencement of permission for remote consultation sessions.
Downey and Kirkpatrick expressed their gratitude to all parties involved who helped make it possible, including the NRMLA, MMBA, the Department of Banking and members of the Massachusetts Legislature, including Lipper-Garabedian.
To get this kind of legislation and lobbying done, “the stars have to align,” Kirkpatrick said. “You have to find the right people, the right time, and you have to strike while the iron is hot.”
