At the National Association of Reverse Mortgage Lenders (NRMLA) Annual Meeting and Expo in San Diego this week, Federal Housing Administration (FHA) Commissioner Julia Gordon addressed the assembled audience of reverse mortgage industry professionals and reflected on her time in the post as the Biden administration comes to a close.
The event marked Gordon’s third consecutive appearance at an NRMLA annual meeting, and it allowed her to add perspective to the broader permutation of the Biden-Harris administration. U.S. Department of Housing and Urban Development (HUD)’s Housing Priorities. Gordon paid specific attention to the events surrounding the Home Equity Conversion Mortgage (HECM) program.
Thinking about HECM priorities
When NRMLA CEO Peter Bell asked about the key initiatives and accomplishments she has been able to oversee during her time as commissioner, Gordon immediately mentioned the publication of HUD’s Single Family 4000.1 Handbook, which included a long-awaited HECM section. This brought together years of policy guidelines and mortgage letters (MLs) into one document.
“For us, getting the handbook out was one of my top priorities when I came in,” Gordon said. “I witnessed the transformation that took place in the mortgage industry after that manual was first introduced, and I hope this manual will have a similar impact on consistency, quality and eliminating confusion. It is essential that everyone is on the same page.”
The entire document – published nine years after the first version of the 2014 4000.1 manual – consolidates and replaces Mortgage Notes dating back in whole or in part to 1995. It “eliminates more than a hundred individual policy documents related to the HECM program , HUD said upon publication in October 2023.
Gordon also spoke about addressing liquidity concerns in the reverse mortgage market following the disruptive 2022 bankruptcy of a major lender, and praised the partnership HUD and FHA have had with Ginny Mae to address the resulting challenges.
“We are also very proud of the work we did about two years ago to support liquidity in this sector during difficult times,” she said. “I am especially proud of how closely we have worked with Ginnie Mae. Coordination across silos has been a hallmark of this government.”
Reflections beyond HECM
But the HECM program is just one part of a much larger portfolio that HUD oversees. Gordon also says he looks back with pride on the reduction in the mortgage insurance premium (MIP) for term mortgages for single-family homes.
“These premiums had increased significantly after the crisis, and frankly we were paying too much for insurance at that point,” Gordon said. “Reducing those costs while maintaining a strong Mutual Mortgage Insurance (MMI) Fund is something I am very proud of. How many people are cutting prices right now? Hardly anyone, but we did it.”
Gordon also cited a policy that now allows positive, on-time rent payment histories to be counted when making a lending decision for a first-time homebuyer. She said this is something she has long hoped HUD would do.
“Initially there were concerns about whether we could implement this with our technology, but we found a relatively low-tech solution,” she says. “This change has already resulted in thousands of people participating in the program who otherwise would not have been able to.”
Gordon also mentioned updates and expansions to HUD’s 203(k) renovation loan program, along with seeking additional construction and affordability options through manufactured homes and factory-built modular homes.
“Currently built homes are almost indistinguishable from site-built homes and offer exciting possibilities,” she said. But the U.S. lags behind other countries in off-site construction efforts, she added, something she hopes HUD can have an impact on in the coming years.
Attention to housing is growing
When Bell asked about the increasing prevalence of conversations about housing that go beyond specific events, departments and officials, Gordon agreed, adding that attention to housing issues appears to have reached a crescendo in recent years.
“From the beginning of this administration, even before I was in office, I have noticed that there is more interest and focus on housing than we have seen in many governments, regardless of which party was in government. White House” said Gordon. “That was really exciting. I would also note that much of that interest was actually driven by the vice president’s office, even before some of the most exciting events in the campaign took place.
Kamala Harris has been involved in more than one HUD housing policy announcement in recent years, but all of these discussions add up to a reality that Gordon finds encouraging.
“For us, this means we have more opportunities to spread our message more widely,” she said. “When the president gives big speeches where housing is the central topic, or as people saw during the recent campaign debate, where housing was mentioned multiple times in different areas – whether it’s renting or homeownership – it helps get the message across to the public. spread the word that housing is a crucial issue that we all need to pay attention to.”
