The main point of the article is right on target. In fact, the shame lies with AARP for remaining silent for so long. Where were they when HUD first promulgated this rule that was seemingly fabricated, magician -like out of thin air? The rule makes no sense-I should say its clarification made no sense in 2008 and makes little sense now. The rule clearly suggests without equivocation that for the first 20 years of the program, the entire industry "misapplied" this rule. The fact remains that HUD was aware of the way the rule was understood by every member of the reverse mortgage industry and waited for 20 years to issue this clarification. This is so laughable, that it is not funny at all. Few stood up to voice a contrary opinion.
In the latest onslaught against the reverse mortgage program the NY Times article mistates and over simplifies some of its salient arguments about the program. Here are three quick examples: 1. It speaks of charlatans who engage in cross-selling financial products. while this practice made headlines years ago, many states have outlawed the practice and federal law has outlawed the practice since 2008. FINRA strictly prohibit its members from using reverse mortgage proceeds to purchase said products; 2. Reverse mortgage underwriting is not based upon how long the lender thinks a senior will be in the home; 3. Getting advice from 2 or more counselors is feckless advice and shows that the author has no idea about the intese counseling protocol requirements.
The article is a clear illustration of how abusive government power can issue rules and regulation at will-with no basis in fact or law. When such a show of power is not decried by the reverse mortgage industry, government will usurp even more power, as it did with the introduction of its "Final Rule 5356-F-02". This rule took effect in 2011-without proper statutory authority. Again the feckless reverse mortgage industry remained silent.
The industry better wake up from their somnolent respite or one day it will discover that its worst "nightmare" will not be the thing of dreams. This once great industry will suddenly vanish because it had no backbone.