CFPB: Reverse Mortgages Represent Two Percent of Complaints In 2012, the Consumer Financial Protection Bureau (CFPB) established an online platform for consumers to lodge complaints against financial services providers. The good news is that reverse mortgages have consistently ranked low on the complaint list. Out of 29,100 mortgage-related complaints submitted to the CFPB in 2022, approximately 400, or two percent, were brought against reverse mortgage companies, according to the CFPB’s Consumer Response Annual Report, which can be downloaded at https://bit.ly/46wZakC. In 2022, consumers submitted 300 reverse mortgage complaints. They expressed frustration in getting statements or a payoff amount from their lender, or they stated they were having difficulties making a payment or paying off a reverse mortgage. In their responses, companies apologized for the delay and provided the requested information. In other responses, companies requested follow-up information from consumers. The vast majority of the reverse mortgage complaints were closed with an explanation (i.e., most of the complaints were closed without monetary or nonmonetary relief). New Colorado Law Protects Borrowers Impacted by Natural Disasters NRMLA achieved an important legislative victory when Colorado Gov. Jared Polis signed legislation (House Bill 1266) into law on June 7 that provides new protections for reverse mortgage borrowers who must temporarily vacate their properties after a federally declared natural disaster. The bill was sponsored by state Rep. Kyle Brown after one of his constituents nearly lost his home to foreclosure after it was rendered uninhabitable following the Marshall Fire in 2021. Effective immediately, the new law prevents a HECM from being called due and payable because of a temporary absence from the home due to a natural disaster as long as: • The borrower is engaged in repairing the home with the intent of reoccupying the home as a principal residence or selling the home; • The borrower stays in communication with the lender while the home is being repaired; • The borrower complies with all other terms and conditions of the reverse mortgage; and • Repairing or rebuilding the home does not reduce the lender’s security. NRMLA worked closely with Polis, the Colorado Mortgage Bankers Association and several Coloradobased NRMLA members to draft a bill acceptable to the industry and the U.S. Department of Housing and Urban Development. U.S. Older Population Grew at Fastest Rate in 130 Years The 2020 U.S. Census continues to yield interesting statistics that help underscore the growth potential for the reverse mortgage marketplace. On May 25, the U.S. Census Bureau revealed that the U.S. population 65 and older grew nearly five times faster than the total population between 2010 and 2020, reaching 55.8 million, or 16.8 percent of the population. This represents the fastest rate of growth of any decade in the U.S. since 1880 to 1890. The older population increased by 50.9 million, from 4.9 million (4.7 percent of the total U.S. population) in 1920 to 55.8 million (16.8 percent) in 2020. This represents a growth rate of about 1,000 percent, almost five times that of the total population (about 200 percent). Other highlights are as follows: • In 2020, about one in six people in the U.S. were ages 65 and over. In 1920, this proportion was less than one in 20. • The 65 to 74 age group was the largest of the older age groups, with 33.1 million people, representing over half of the 65 and older population, or one in ten Americans. • While the share of the U.S. population ages 65 and older grew, the nation remained relatively young compared with many of its peer nations. Japan had the largest share (28.5 percent) of older residents, while the U.S. ranked 34th (16.8 percent). FHA Finalizes Policies to Expedite HECM Assignments An important policy change occurred on May 17 when the Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2023-10 to allow for faster Hey, Members Hey, Members continued from page 6 8 REVERSE MORTGAGE / SEPTEMBER–OCTOBER 2023
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